reward-allocations.md

description
OLP Reward Allocations to Markets and Market Makers

Reward Allocations

Market Reward Allocations

Rewards are allocated to eligible markets in two different methods:

1. Static allocations
2. Static allocations with a dynamic component

Static Market Reward Allocations (Preallocations)

12.5% of INJ rewards will be preallocated to each of the BTC/USDT PERP market, ETH/USDT PERP market, and INJ/USDT PERP market. 1% will be preallocated to each remaining eligible market as a minimum allocation:

Market	Total Allocation
BTC/USDT Perp	12.5%
ETH/USDT Perp	12.5%
INJ/USDT Perp	12.5%
Other Eligible Markets	1% each + formula based allocation, with reward cap based on formula (see table below)

{% hint style="info" %} Static allocations may change over time as more markets are added to the eligible list {% endhint %}

Dynamic Market Reward Allocations

The remaining rewards will be allocated to the eligible markets (excluding BTC/ETH/INJ Perps) based on the following equation:

$$ Rewards_{Market_i} = TAR * Preallocation_{Market_i} + TAR * (1- Preallocation_{Total}) *\newline \frac {\sum\limits_{MM} (LS_{MM,\ Market_i})^{0.7} * Volume_{MM,\ Market_i}} {\sum\limits_{Market}\sum\limits_{MM} (LS_{MM,\ Market})^{0.7}*Volume_{MM,\ Market}} $$

$$ \text{where} \quad Preallocation_{Total} = 0.125+0.125+0.125+Other\ Preallocations $$

$$ \text{and} \quad TAR = Total\ Available\ Rewards $$

{% hint style="info" %} $$Other\ Preallocations$$ refers to the static market reward allocations for non-BTC, ETH, and INJ perp markets.

For more information on $$TAR$$ each epoch, see the Reward Pool page. {% endhint %}

For each eligible market, the product of the MM¹’s $$LS^{0.7}$$ and $$Volume$$ is aggregated across all MMs. Rewards are allocated to each market based on the proportional aggregate products across all applicable markets. The preallocation amount (1%) for the market is also added in.

Markets Added Partway Through an Epoch

For markets added to the eligible list midway through an epoch, the 1% preallocation will be prorated. For example, if ARB/USDT is added on the 15th day of the epoch, then the market will receive a 0.5% preallocation (there are 14 days left out of 28. If there are 17 days left, then the market will receive $$\frac {17}{28} * 0.01$$).

Market Allocation Cap

For each market that has dynamic reward allocations, a hard cap will be applied according to the following formula, where $$n$$ is the number of eligible markets excluding BTC, ETH, and INJ perps:

$$ Rewards_{max} = TAR\ *\ \frac{1 - 0.375}{n}*2 $$

Any reward allocations that exceed the cap will be redistributed amongst the other eligible markets according to the dynamic allocation formula.

# Eligible Markets Excluding BTC/ETH/INJ Perps	Rewards Cap
6	20.83% of Total Available Rewards
7	17.86% of Total Available Rewards
8	15.63% of Total Available Rewards
9	13.89% of Total Available Rewards
10	12.50% of Total Available Rewards
11	11.36% of Total Available Rewards
12	10.42% of Total Available Rewards
...	...

Market Maker Reward Allocations

Rewards to individual MMs² will be allocated based on the following equation:

$$ Rewards_{MM_i} = \sum_{Market}\left(Rewards_{Market} * \frac {TS_{MM_i, \ Market}} {\sum_{MM} TS_{MM,\ Market}} \right) $$

Each MM³ will receive rewards based on the MM⁴’s proportional $$TS$$ within the market, subject to governance approval.

{% hint style="info" %} Rewards for addresses totaling < 1 INJ at the end of each epoch will be disregarded to reduce the overhead of the disbursement process. {% endhint %}

Footnotes

1. Market Maker ↩

2. Market Makers ↩

3. Market Maker ↩

4. Market Maker ↩