Overview
The LP Rewards program incentivizes providing liquidity by rewarding well-placed limit orders. These rewards promote tighter spreads, thicker order books, and a healthy marketplace. The design iterates on an industry-standard approach used by dYdX and Polymarket, with specifically tuned parameters to ensure competitiveness and fairness.Methodology
- Rewards are earned by placing limit orders within a specific spread from the market midpoint*
- The closer an order is to the midpoint and the more competitive its size, the higher the reward
- To qualify, orders must exceed the minimum size threshold set on a per-market basis
- Rewards are calculated every minute across all markets and paid out daily at 22:30 UTC
*To maintain a fair market-making experience, only limit orders that exceed the minimum shares threshold count toward the midpoint calculation.
Rewards parameters
Each market has 3 parameters that define how rewards are paid out:
These parameters are set to support positive market activity while accounting for each market’s uniqueness.