[Implemented] Change trading rewards structure, make rewards more predictable

Proposal Structure

  • Title: Change trading rewards structure, make rewards more predictable
  • Author(s): Victor Ionescu (@gxmxni)
  • Related Discussions:
  • Submission Date: 11/23/2022

Body Paragraphs:

  • Simple Summary:

Change trading rewards as follows:

  • for each stable coin trade, earn 0.0001 HFT per USD traded
  • for each non-stable coin trade, earn 0.0005 HFT per USD traded

Set a ceiling of 350K HFT per month, broken down by trade type (see below).

  • Abstract:

Hashflow is already the DeFi exchange with best execution, by means of guaranteed zero-slippage rates. I believe the current trading reward scheme is too generous, and incentivizes back-and-forth trading in a very skewed fashion.

Moreover, the Hashflow team runs algorithms that try to detect such behavior and normalize the rewards, in order to be more fair toward organic volume traders. These algorithms are not perfect. On top of that, there is little transparency intra-month around how many rewards are going to be received.

The goal of trading rewards is not to compensate traders, since Hashflow is already a fantastic trading venue. It is to distribute fair stakes in the protocol toward people who are using it, and empower them to participate in governance and staking schemes.

The proposal is to award 0.0005 HFT / USD traded for trades that are not stable coin trades, and 0.0001 HFT / USD traded otherwise. For example:

  • if you trade 100,000 USDC to ETH, you will get 50 HFT
  • if you trade 100,000 USDC to DAI, you will get 10 HFT

The proposal is to cap the amount of HFT distributed on stables to 125,000 monthly, and the amount distributed on non-stables to 225,000 monthly. This totals 350,000 total HFT monthly distributed. Amounts are daily prorated.

This should reward up to 15MM daily in non-stable coin volume and 40MM daily in stable coin volume.

Moreover, these rewards should be displayed in the Hashflow UI at the time of the quote.

Aggregators should be excluded from these rewards.

  • Motivation: See above.

  • Specification & Rationale: See above.

  • Benefits (Pros):

  • more transparent, deterministic reward behavior
  • reducing the number of HFT distributed monthly for trading, given the other value propositions of Hashflow
  • Downside (Cons): Are there any disadvantages with implementing the proposal?

Some of the fake volume bots could be less incentivized if they don’t get asymmetric returns. However, I do not think that these bots are essential to our long term success.

  • Voting:
  • Yes – agree with the outlined scheme
  • No – disagree

Great proposal - don’t see any drawbacks.

1 Like

I like this suggestion, as I’m always in favor of transparency
It would also be a good solution if you could see your rewards in real time (and that would serve as an incentive to use Hashflow)
*Because many users don’t fully understand how the current trading rewards work and accrue

This is almost Exactly what I wanted to propose for trading rewards section

First, there is no reason we would want to reward users who attracted hashflow by the best price quotes when using aggregators like 1inch etc. when someone uses aggregators they only care about the best price, not the best UX and most favorable deal!
Second , since most of the trading volume comes from aggregators we can lower the ceiling of 350K HFT to even 300K HFT per month!

PS: Showing rewards on the UI in real time is what we should have done in the first place as I suggested before

overall this is one of the best proposal at the moment and should be a top priority and send for voting on snapshot!


1 Like

noting that i’ve noticed that the mostly traded pair is usdc/usdc.e on avalanche chain which seems to be fake / wash trading that passes the current audit system somehow and gets advantage of trading rewards

Only thing I would add … a bonus percentage for people who use the protocol regularly. Or that trading rewards only kick in after a certain number of trades… would also need to be displayed in UI at time of quote

My general take on this is that usage should not be incentivized by HFT, but by the quality of the actual product. As such, I believe that we should offer these rewards uniformly, as a way to distribute governance, and there is no extra need to create complicated incentive schemes.

As an additional thought, I believe that the HashVerse should be how the most loyal contributors accrue points and get rewarded. Naturally, trading activity should count toward HashVerse rewards. I also think that, at that point, we should scale down pure Trading Rewards and have them ported over to HashVerse rewards.

good point! generally what we are looking for is to give some voting power (HFT token) to those users who will use our product from main UI.

for this example we have the ceiling of 350k per month and fixed amount of HFT rewards.
but when total volume grows, some of users won’t get their rewards.

my idea – we keep current mechanism, but decrease total rewards amount to 350k, so everything will get some rewards.
we can also use this:
n*2,5 – for altcoin trades
n/2 – for stablecoin trades

The comment period for this thread is now closed - thanks for all the comments!