An overview of Trading Rewards and the Rewards Module.
Trading Rewards will be distributed to users who trade on dYdX Chain based on the Trading Rewards formula. The objective of Trading Rewards is to (1) incentivize all traders to use the dYdX Chain and (2) accelerate market liquidity and overall product usage.
| Title | Value | Definition |
|---|---|---|
| Module | Name | Address |
|---|---|---|
The characteristics of the dYdX Chain Trading Rewards are as follows:
self-trading should not be profitable,
any distributed rewards should be proportional to fees paid to the protocol,
trading rewards should be deterministic,
trading rewards should be settled and distributed every block,
trading rewards should limit the protocol overspending on trading activity.
DYDX will be distributed to traders on the dYdX Chain using the formula below. DYDX from Trading Rewards will be sent directly to a given user’s account after each order fill (which takes place at the end of a given block). Users can earn trading rewards up to, but not exceeding, 100% of a fill’s net trading fees. As such, Trading Rewards distributed by the protocol, each block, are capped at the dollar equivalent of the total net trading fees generated by the protocol that block.
The calculation of the trader scores (S) incorporates the following elements:
The sum of all traders’ rewards scores at a given block (“S”) is essentially the amount of total fees paid accounting for maker rebates and fees.
In the event there is a remaining amount of DYDX in the Rewards Treasury (T-A), such DYDX will remain in the Rewards Treasury and be distributed to traders in a proceeding block.
DYDX vests every second from the Rewards Treasury Vester to the Rewards Treasury. At the end of a given block vested DYDX (Trading Rewards) will be automatically distributed to a trader’s dYdX Chain account.
In DIP 2 on the dYdX Chain, the dYdX community voted to credit the dYdX Chain Rewards Vester with 54,077,073 unvested DYDX tokens based on the remaining allocation for Trading Rewards from DIP 29 on dYdX v3.
| Term | Definition |
|---|---|
rewards_treasury
The account which Trading Rewards are funded from
adydx
The token that Trading Rewards are funded in
-18
The decimals of the Trading Rewards token
1000001
The market which tracks the oracle price of the token that Trading Rewards are funded in
0.50
The protocol constant “ C” for the Trading Rewards
x/rewards
`rewards_treasury`
dydx16wrau2x4tsg033xfrrdpae6kxfn9kyuerr5jjp
x/rewards
`rewards_vester`
dydx1ltyc6y4skclzafvpznpt2qjwmfwgsndp458rmp
Field Name
Description
The account to vest tokens from
The account to vest tokens to
The token that is vested
The start time of vesting
The end time of vesting
Value
rewards_vester
rewards_treasury
adydx
2021-08-03T15:00:00Z
2026-08-03T15:00:00Z
Account
dydx1ltyc6y4skclzafvpznpt2qjwmfwgsndp458rmp
dydx16wrau2x4tsg033xfrrdpae6kxfn9kyuerr5jjp
A
Amount of tokens distributed from T in a given block.
C
Constant value ranging from 0 to 1.
T
The size of the Rewards Treasury pool, which fluctuates according to protocol activity and contains vested DYDX tokens.
p
Price of DYDX
S
Sum of all trader’s scores
