Adjusted Volume for Makers
Incentive programs in DeFi often face a key challenge: ensuring high-quality orders for a healthy market with competitive prices.
The core of our reward system uses an adjusted volume calculation that considers both the quality and age of orders. Adjustments are critical to ensure that makers who provide competitive, high-quality liquidity receive the most rewards, aligning incentives with market health and sustainability.
The adjusted volume calculation incorporates the following elements:
The historical spread quality:
Orders placed closer to the mid-price receive higher rewards due to tighter spreads. Tighter spreads improve market competitiveness and favor makers who offer the best prices for takers.
The historical volume consistency:
The system evaluates whether the maker’s historical activity aligns with the effective volume generated over time. Consistent contributions are rewarded proportionally.
Historical window (historicity):
A “window” is used to assess past activity. This window can be adjusted (made narrower or wider) to more or less account for long-term contributions or adapt to specific users (like Kandel’s Makers).
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