Reward Rate ρ

The reward rate (ρ) is the conversion rate between the effective trading volume and the amount of MGV tokens earned. This rate serves as the foundation of Mangrove’s transparent and balanced incentive system, ensuring participants are rewarded for their genuine contributions to market activity.

The ρ is subject to adjustment based on the volume to meet the target of total MGV distributed per epoch and per user type. In general, the ρTaker is typically assumed to be 10 times smaller than the ρMaker (meaning makers can receive up to 10 times more rewards than takers).

The traded volume—whether adjusted or not—is expressed in the quote currency of the market. For example, on the weETH/WETH market, the volume is measured in ETH. The ρ coefficient (taker or maker) serves as a conversion factor, expressed in MGV per quote, translating the traded volume into MGV rewards. This simple conversion mechanism ensures a transparent link between user activity and the rewards earned, aligning incentives across the ecosystem.