- Title: Change trading rewards structure, make rewards more predictable
- Author(s): Victor Ionescu (@gxmxni)
- Related Discussions:
- Submission Date: 11/23/2022
- 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).
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.
- 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.
- Yes – agree with the outlined scheme
- No – disagree