dydx Re-launch Rewards Explainers

Trading Points

Traders earn points by paying taker fees. Taker fees in non top 5 markets will earn twice as many points as fees in the top 5 markets.

At the end of the season, the value of DYDX tokens earned by a trader will be calculated as their share of total trading points multiplied by the $600k trading reward pool.

A 7-day TWAP of the DYDX price will convert the allocated dollar reward amounts into DYDX tokens, which will then be distributed.

Market Maker Points

Market makers earn points by fulfilling taker orders and providing liquidity to the order book. The closer the spreads on this liquidity, the higher its weighting.

At the end of each hour, each maker's total maker volume satisfied, V, and liquidity score, L, will be calculated in each market, i. The number of maker points earned over the hour in all markets will then be computed as: $\text{points}_{\text{Maker}} := \sum_i \kappa_i \cdot V^{0.7} \cdot L^{0.3}$ where

is computed as the total dollar value of maker volume in the market i in the hour

$L_i$ is computed as follows:

1. The dollar value of each market maker’s order book liquidity in each market is sampled frequently throughout the hour within 25bps, 50bps, and 100bps of the market price.
2. The liquidity score is calculated in each market as follows: $L_i : 16 \times L_{25} + 4 \times L_{50} + L_{100}$

Only makers satisfying over 0.25% of total maker volume over a season will earn maker rewards at the end of a season.

Season 7 will run for 1 month from the launch of dYdX Unlimited. There will be four seasons in this iteration of the incentive program.

A 7-day TWAP of the DYDX price will convert the allocated dollar reward amounts into DYDX tokens, which will then be distributed.