- Reward early traders with part of the inflation rewards to attract more traders to the system
- Distribute PERPs to the hand of users
- Create a positive feedback loop for traders and stakers.
- Prevent wash trading
- Providing liquidity mining rebates for 1) trading fees 2) funding payment.
- The Liquidity Mining program will test run for 4 weeks after the mainnet launches and see how it goes.
- 50% of the inflationary rewards will be used for this Liquidity Mining program.
Reward Calculation Time
At the end of every week (Sun 00:00 UTC)
- Perpetual Protocol aggregates all the trading fees and funding payment paid by each network participants of the given week into a spreadsheet
- Each network participant is rewarded USD-denominated value of PERP based on 100% of their aggregated trading fees and 50% of their aggregated funding payment.
The USD price of PERP is TWAP of that week.
- The rewarded PERPs are capped by 50% of the inflation rewards that week. Once the rewarded PERPs > the cap, the rewarded PERPs will be proportionally distributed.
- 80% of the paid PERPs are locked on-chain for one year, and the rest 20% is claimable right away. The locked rewards would not be staked in Staking Pool.
- Perpetual Protocol pays each network participant by submitting an on-chain (or several) transactions.
- Upload the spreadsheet to IPFS for everyone who wants to verify it.
Alice pays $50 of trading fees to open a long position on Monday and also pays $20 of funding to shorts on the same day. At the end of the week, she would receive $60 of PERP to compensate her fees.
She could claim $12 of PERP right away, and the other $48 of PERP one year after.
Updates to the Funding Payment
- 50% of the funding payment would be sent to Insurance Fund instead of the receivers of the funding payment. This is to prevent wash trading.
Pros and Cons
- Traders earning PERPs → more fees → more Insurance Fund / more yield for stakers → more demand of PERPs → more traders earning PERPs
- Perpetual Protocol is giving 100% taker rebates, and so it’s “free” for traders to trade, but it also disincentivizes wash activity because of USD-denominated value of PERP and one-year locked-up
- Off-chain process that’s easy to update
- Need a reliable TWAP price before it launches
Parameters Updatable by Governance
- The ratio of liquidity mining
- 50% of the total inflation rewards
- The ratio of 1-year reward lockup
- 80% will be locked-up for one year
- 20% will be claimable after the epoch
- The raito of PERP rewards
- 100% of trading fees
- 50% of funding payment