SIP-2003: Perps V2 Trading Incentives

Author	Mike
Status	Implemented
Type	Governance
Network	Optimism
Implementor	TBD
Release	TBD
Proposal	Loading status...

Simple Summary

Allocate 200,000 OP in weekly Perps v2 trading rewards for 17 weeks after a three week ramping period.

Abstract

The perps v2 contracts have now been live on Optimism for over a month. While the mechanism requires some improvements, which are already planned, incentivizing activity can help bootstrap an active market that is healthy for the network. This SIP proposes to allocate OP held by the Treasury Council to a rewards program for perps v2. OP rewards will be distributed weekly across integration UI’s via a Merkle drop on Optimism.

Motivation

With new markets launching and updates to the Perps V2 contract in progress, now is an appropriate time to deploy these funds to drive volume to the protocol and support active perps v2 markets.

Specification

Overview

The implementation of the trading incentives involves a basic formula to compute trader scores for users on a weekly basis, as well as a means for distributing rewards to users.

Rationale

This distribution mechanism skews heavily towards fees paid and volume which is beneficial for the protocol and stakers. Further, a staked SNX multiplier is introduced to align incentives between the protocol and users.

Technical Specification

The total $OP rewards will be distributed weekly over the course of 20 weekly trading epochs as outlined below:

Week 1: 50,000 OP

Weeks 2-3: 100,000 OP

Weeks 4-20: 200,000 OP

Users are assigned a trader score based on their total fees paid and time-averaged open interest (rawScore), defined as follows:

rawScore = feesPaid^0.8 * averageoi^0.2

traderScore will then be calculated including a staked SNX multiplier:

traderScore = rawScore * stakedTierMultiplier

with staked SNX multipliers defined by the following tiers:

| SNX Staked                |  Staked Tier Multiplier  |
| 2500 - 5,000 SNX          |  1.05                    |
| 5001 - 10,000 SNX         |  1.075                   |
| 10,001 - 20,000 SNX       |  1.1                     |
| > 20,001 SNX              |  1.15                    |

Each trader will then earn a pro rata share of the total weekly rewards

traderScore / sum(traderScores) * weeklyReward total = yourReward

The Synthetix Treasury Council will distribute OP on a semi-regular basis to a designated contract for integrators to connect with and enable claims using their UI.

Test Cases

n/a

Configurable Values (Via SCCP)

feesPaid weight averageOI weight stakedTier multipliers weeklyRewards total amount