Arbitrum STIP Rewards for Rysk Phase 2
12/1/24 Update: the distribution has been extended and weekly pool grants size changed since this article was published, see this article here for the details!
Since the launch of the STIP incentives Rysk has shown a tremendous growth in volumes, TVL and users. Goal of the incentives in the proposal was to increase volumes with a target of 3k contracts traded per week and to increase TVL to $3m. Those targets were hit in the first week of the STIP.
Below a recap of the distribution figures in the first 4 weeks of the STIP:
- average ARB per contract sold: 7.3 ARB
- average ARB per contract bought: 9.5 ARB
- average returns for Liquidity Providers: 0.77% weekly / 40% annualised
Phase 2
Since the STIP was launched, we have collected feedback and ideas to maximize the STIP goal of growing the Arbitrum options market and ecosystem. As a result, starting from December 8th 8AM UTC (1702022400), the incentive mechanism will be updated with some slight modifications. Below the details:
Traders
Start Date: December 8th, 8AM UTC (1702022400)
Total weekly grants pool: ~17.8k ARB
Eligibility: every contract traded is eligible to earn a share of the weekly grants pool at option expiry (every Friday 8AM UTC)
Distribution:
Each contract traded will receive proportional rewards based on the following distribution:
80%: Selling contracts — trades that sell options (closing a bought contract does not qualify).
15%: Buying contracts on longer dated expiries (≥ 30 DTE) — trades that buy options with 30days expiry or more (closing a sold contract does not qualify).
5%: Buying contract on shorted dated expiries (≤ 30 DTE) — trades that buy options with expiry lower than 30 days (closing a sold contract does not qualify).
Note: Each position (buy and sell) needs to be held for at least 12hrs to be eligible. This changed from current mechanism were position needed to be held for at least 24hrs.
Liquidity Providers
No changes will be made on the LPs distribution mechanism. Below a recap
Total weekly grants pool: ~17.8k ARB
Eligibility: anyone with a deposit in the DHV when the weekly epoch is executed (every Friday)
Distribution:
- airdrop every Friday after weekly epoch ends
- (user shares / total shares) X total weekly grants pool
Differences with previous distribution
Traders
- minimum holding for a position is now 12hrs (from 24hrs)
- On the buy side all trades are now eligibile:
- 5% of traders incentives to shorted dated expiries (<30DTE)
- 15% of traders incentives to longer dated expiries (≥ 30DTE)
Liquidity Providers
No changes made
Notes
The new distribution mechanism will start for trades starting December 8th 8AM UTC (1702022400).
Distribution mechanism might change again in future weeks based on feedback and result. Any new mechanism will be communicated accordingly. Trades that are identified as wash trading can be flagged and will not be eligible for rewards. Wash trading includes but is not limited to:
- Immediately opening and closing a position;
- Buy and sell (or vice versa) of the same instrument in a very short timeframe, even from different addresses.
