Liquidity Bootstrapping Program

Liquidity Incentive Program

To attract more liquidity to RabbitX, the Liquidity Incentive Program is a scheme that offers incentives to liquidity providers who provide deep, two-sided markets.

The RabbitX Liquidity Incentive Program has been carefully designed to maximize the liquidity of the exchange and reward liquidity providers that supply effective liquidity.

The incentive program will provide 7.5% of the initial token supply of RabbitX tokens (75,000,000 RBX) to be distributed to Liquidity Providers (LP) over two years based on metrics measuring the LP's spread, depth and uptime. The program is currently open; apply through the link below.

Apply here

RBX token on Coingecko.

Eligibility

LPs must have maker volumes greater than 2% of the total exchange maker volume and have a minimum of 90% uptime each month to be eligible to participate. LPs participating in the incentive program will not be eligible for any other rewards, including airdrops, trading rewards, etc. LPs accounts in the incentive program will not be counted toward referral rewards.

Motivation

Liquidity on RabbitX is crucial for several reasons. Firstly, liquidity makes it easier for traders to execute trades quickly, efficiently, and at a fair price. This is because there is less slippage, which occurs when there is not enough liquidity in the market, causing orders to be filled at a different price than intended. In a highly liquid market, orders can be executed at or close to the current market price, which benefits traders by minimizing costs and maximizing profits.

Secondly, high levels of liquidity attract more traders to the exchange, which in turn attracts more liquidity and creates a virtuous cycle. This creates a network effect where traders are more likely to trade on a platform with high liquidity as it offers better trading opportunities and more choices in terms of trading pairs.

Finally, a highly liquid market promotes stability and security. In times of high volatility or market stress, liquidity helps to absorb sudden surges in demand or supply, preventing sharp price movements that could harm market stability. This, in turn, helps to build trust in the platform and increase confidence among traders.

Goal

The program's goal is to incentivize market liquidity based on three metrics:

  1. Two-way Bid/Ask spread

  2. Two-way Bid/Ask size

  3. Uptime

Fee Schedule

TierMaker Volume (monthly)Maker FeeTaker Fee

Liquidity Provider

0.5%+ of exchange maker volume

-0.015%

0.025%

Program Details

7.5% of the initial token supply of RabbitX (75,000,000 RBX) will be distributed to liquidity providers based on the QFINALQ_{FINAL} measuring the liquidity provider's width, depth and uptime per monthly epoch.

QFINAL=QEPOCH0.65βˆ—MakerVolume0.35βˆ—UptimeScoreQ_{FINAL} = Q_{EPOCH}^{0.65}*MakerVolume^{0.35}*UptimeScore

Calculation methodology

The following methodology calculates how much token rewards each liquidity provider receives per monthly epoch. Liquidity providers earn token rewards proportionate to their relative share of QFINALQ_{FINAL}.

Orders below a certain minimum depth (MinDepth) per market are excluded, and orders over a certain maximum spread (mid-market spread) (MaxSpread) are also excluded. Snapshots are taken every minute using random sampling.

note: starting 1 October 2023, Spread will be clamped to 0.005% or 0.00005. Spread = max(0.00005, Spread)

Calculation steps:

  1. Calculate Qbid=BidDepth1(Spread1)1.5+BidDepth2(Spread2)1.5+BidDepth3(Spread3)1.5...Q_{bid}=\frac{BidDepth_1}{(Spread_1)^{1.5}}+\frac{BidDepth_2}{(Spread_2)^{1.5}}+\frac{BidDepth_3}{(Spread_3)^{1.5}}...

for each order where BidDepth > MinDepth and with Spread < MaxSpread(Mid-Market)

For example, Assume a liquidity provider has multiple open bid orders (1 BTC at $29,995, 5 BTC at $29960, 10 BTC at $29,500) on the BTC-USD order book and BTC is currently at $30,000 (based on mid price). Assume MinDepth is $5000, MaxSpread vs. mid-market is $60, or 20 Basis Points ($60/30000). A basis point is 0.01% = 0.0001.

The second order, 10 BTC at $29,500, is not qualified, as the order spread exceeds the max spread.

QBID=1βˆ—29995/(5/30000)1.5+5βˆ—29960/(40/30000)1.5Q_{BID} = 1*29995/(5/30000)^{1.5} + 5*29960/(40/30000)^{1.5}

  1. Calculate Qask=AskDepth1(Spread1)1.5+AskDepth2(Spread2)1.5+AskDepth3(Spread3)1.5...Q_{ask}=\frac{AskDepth_1}{(Spread_1)^{1.5}}+\frac{AskDepth_2}{(Spread_2)^{1.5}}+\frac{AskDepth_3}{(Spread_3)^{1.5}}...

for each order where AskDepth > MinDepth and with Spread < MaxSpread(Mid-Market)

  1. Q_BID and Q_ASK are calculated every minute at random intervals.

  2. Encourage 2-sided liquidity by taking the minimum of Q_bid and Q_ask (that means if the market maker only provides liquidity of one side, they will get 0 by missing the other side)

QMIN=min(QBID,QASK)Q_{MIN}= min(Q_{BID},Q_{ASK})

  1. Q_EPOCH is the sum of all Q_MIN in a given epoch

QEPOCH=βˆ‘nQMINnQ_{EPOCH} = \sum^{}_{n}Q{MIN}_n

  1. Uptime_EPOCH is the percentage of time in an epoch that a given market maker was live and quoting on both the bid and ask sides with order sizes greater than the stated order minimum and spreads smaller than the stated maximum spread.

  2. Calculating uptime:

UptimeEPOCH=βˆ‘Count(QMIN>0)24βˆ—60βˆ—30Uptime_{EPOCH}=\frac{\sum_{}^{}Count(Q_{MIN}>0)}{24*60*30}

UptimeScore=1/(1.1βˆ’UptimeEPOCH)UptimeScore=1/(1.1-Uptime_{EPOCH})

  1. Rewards and uptimes are calculated per market. Each market has a % allocation of total rewards per month.

  2. MakerVolume is the total volume that the liquidity provider traded from the maker side

  3. Q_Final normalizes Q_epoch to account for uptime and also maker volume

QFINAL=QEPOCH0.65βˆ—MakerVolume0.35βˆ—UptimeScoreQ_{FINAL} = Q_{EPOCH}^{0.65}*MakerVolume^{0.35}*UptimeScore

The rewards are then distributed based on the Q_final score of each market

rewardmarket=QFINALβˆ‘QFINALreward_{market}=\frac{Q_{FINAL}}{\sum{Q_{FINAL}}}

If a new market is added during the month, the rewards for that market will be distributed pro-rata according to the time remaining in the month.

Parameters of the market maker requirements may change each month based on market makers feedback on the current market conditions.

FAQ

Who is eligible to participate?

Anyone who meets the minimum requirements are eligible to participate in this program. Drop us a message in discord, or apply through the link at the top of this page.

What are the maximum acceptable spreads per market?

MarketMax distance from market-mid

BTC/USD

20 bps

ETH/USD

20 bps

Other perpetual markets

50 bps

What is the minimum cumulative depth ($) per market?

MarketMin Depth

BTC/USD

$50,000

ETH/USD

$50,000

Other perpetual markets

$25,000

What are the token rewards allocation per market?

Rewards allocation per market may change given a 7-day notice. New coin listing rewards are pro-rated based on time.

MarketRewards AllocationMin Spread Req

BTC-USD

10.00%

0.20%

ETH-USD

10.00%

0.20%

SOL-USD

10.00%

0.50%

DOGE-USD

2.60%

0.50%

BCH-USD

2.60%

0.50%

XRP-USD

2.60%

0.50%

MKR-USD

2.60%

0.50%

AAVE-USD

2.60%

0.50%

LINK-USD

2.60%

0.50%

MATIC-USD

2.60%

0.50%

LDO-USD

1.57%

0.50%

SUI-USD

1.57%

0.50%

PEPE1000-USD

1.57%

0.50%

WLD-USD

1.57%

0.50%

TON-USD

1.57%

0.50%

STX-USD

1.57%

0.50%

ARB-USD

1.57%

0.50%

APT-USD

1.57%

0.50%

INJ-USD

1.57%

0.50%

BNB-USD

1.57%

0.50%

RNDR-USD

1.57%

0.50%

TRB-USD

1.57%

0.50%

STG-USD

1.57%

0.50%

RLB-USD

1.57%

0.50%

ORDI-USD

1.57%

0.50%

SATS1000000-USD

1.57%

0.50%

TIA-USD

1.57%

0.50%

BLUR-USD

1.57%

0.50%

JTO-USD

1.57%

0.50%

MEME-USD

1.57%

0.50%

SEI-USD

1.57%

0.50%

YES-USD

1.57%

0.50%

WIF-USD

1.57%

0.50%

STRK-USD

1.57%

0.50%

SHIB1000-USD

1.57%

0.50%

BOME-USD

1.57%

0.50%

SLERF-USD

1.57%

0.50%

W-USD

1.57%

0.50%

ENA-USD

1.57%

0.50%

PAC-USD

1.57%

0.50%

MAGA-USD

1.57%

0.50%

TRUMP-USD

1.57%

0.50%

MOG-USD

1.57%

0.50%

What is the minimum uptime requirement?

To remain in the program, it is required to have at least 90% uptime.

When will token rewards be distributed?

The token rewards earned during each epoch will be subject to a vesting period of 3 months, meaning that they will become available gradually over time. The initial distribution of rewards will occur 30 days after the end of each epoch.

Rewards Emission

A total of 7.5% of token supply will be distributed to liquidity providers. 0.18% of token supply will be allocated to early liquidity providers during March and April for supporting our initial launch. Monthly rewards will increase to 4,411,765 RBX tokens for the first 15 months and slowly decrease over time. Emission schedules may change given a 30-day notice. Any changes in the schedule will be communicated well in advance.

MonthRBX rewards perΒ monthCumulative rewards%Β supply

Mar 2023

800,000

800,000

0.08%

Apr 2023

1,000,000

1,800,000

0.18%

May 2023

2,137,254

3,937,254

0.39%

Jun 2023

3,274,508

7,211,762

0.72%

Jul 2023

4,411,765

11,623,527

1.16%

Aug 2023

4,411,765

16,035,291

1.60%

Sep 2023

4,411,765

20,447,056

2.04%

Oct 2023

4,411,765

24,858,821

2.49%

Nov 2023

4,411,765

29,270,586

2.93%

Dec 2023

4,411,765

33,682,350

3.37%

Jan 2024

4,411,765

38,094,115

3.81%

Feb 2024

4,411,765

42,505,880

4.25%

Mar 2024

4,411,765

46,917,644

4.69%

Apr 2024

4,411,765

51,329,409

5.13%

May 2024

4,411,765

55,741,174

5.57%

Jun 2024

3,952,454

59,693,627

5.97%

Jul 2024

3,493,143

63,186,770

6.32%

Aug 2024

3,033,832

66,220,602

6.62%

Sep 2024

2,574,521

68,795,122

6.88%

Oct 2024

2,115,209

70,910,332

7.09%

Nov 2024

1,655,898

72,566,230

7.26%

Dec 2024

1,196,587

73,762,817

7.38%

Jan 2025

737,276

74,500,094

7.45%

Feb 2025

499,906

75,000,000

7.50%

Last updated