Changes to the Trading Rewards Program

Just over 1 month ago, we released the platform’s first ever trading rewards programme. Since then, there have been several discussions within the DeversiFi community on potential improvements. We have taken it all onboard, and devised a new proposal to the trading rewards program, that is up for discussion within our community!

This proposal combines several community suggestions into one formula change that rewards xDVF holders with a higher percentage of the weekly DVF rewards, incentivising DVF holding, providing utility for xDVF and rewarding long term DVF stakers.

The proposal requires minimal technical changes and is simple to understand - a key requirement of any changes to the rewards program

The proposed changes follows a similar change that dYdX made to their own rewards program

The proposed formula is as follows

image

Where:

r = Trader’s individual DVF reward

R = Total amount of DVF reward pool

s = Trader’s individual score

Fp = Trader’s individual trading fees paid

Ft = Overall DeversiFi platform trading fees

Xp = Trader’s holding of xDVF on the DeversiFi Layer 2 as measured at random intervals

A = 3

B = 0.8

C = 0.2

Whilst it may seem complicated on the surface, the underlying changes are quite simple and ensure that users who stake DVF are rewarded in a fairer manner.

Using a 25,000 DVF reward pool, 2m total xDVF held on layer 2 and $100,000 in fees paid, the following examples apply:

Examples:

  • You can see that in one example, a trader who accounts for 20% of the period’s trading fees, receives only 4.9% of the total DVF rewards if they do not hold any xDVF.
  • A trader who accounts for 20% of the period’s trading fees but has 0.5% of the Layer 2 xDVF supply receives 19.52% of the total DVF rewards
  • A trader who accounts for 20% of the period’s trading fees but has 15% of the Layer 2 xDVF supply receives 38.52% of the total DVF rewards

You can have a look to the full spreadsheet with further information here

We prefer issuing the rewards as DVF instead as xDVF to ensure that trader’s need to make a conscious decision to stake for xDVF. This also rewards xDVF holders to a greater extent as it rewards those who actively turn their DVF into xDVF each period

1 Like

I very much agree with this new transaction reward plan, which can reduce selling pressure and increase the interests of token holders. Where can I check the percentage of XDVF held in the total amount? Will this new trading reward program be implemented next week or immediately this week?

agreed we should reward XDVF holders

This is the proposal. A vote will need to be held on Snapshot. If it passes, then it can be implemented.

This proposal won’t reward all xDVF holders. It will reward all traders and give a kicker to traders who also hold xDVF. Holders of xDVF who do not trade will not receive any rewards in this proposal.

This might be obvious, but I thought it should be stated with some detail as this proposal is titled a trading reward and not a xDVF holding reward.