AIP-15.3: Incentives Amount for Perp - Incentives for New Upcoming Products (Perp)
We would like to incentivize Perp to two main user groups: liquidity providers and traders.
Liquidity Providers:
ALPACA will be used to supplement yields from other fee sources earned by the liquidity providers (borrowing fees, position opening, closing fees, swap fees, etc.), because those fees will take some time to ramp up to a steady level as traders are onboarded to the platform.
- Target liquidity pool’s TVL: $10 - $15Mn
- Target APR% (from ALPACA yields only): 10.5-12% - based on the current yields of comparable pools in the market
- Incentivization period: 2 months
Based on the parameters above, we will require roughly ~$175 - 300k in rewards for liquidity providers. You can see the analysis here.
Traders:
ALPACA will be used as incentives for traders through:
Rewards for trading competition ($50k)
- We plan to run two trading competitions with $25,000 prize pool per competition
0-fee trading ($0)
- Users will be able to open and close positions for free or a relatively nominal fee. We may implement this through rebates. There will still be borrowing interest while positions are kept open.
- This is technically $0 cost required up-front. The cost is to missed revenue during this period, but this should be an effective promotional campaign to get traders to at least try the new product.
Total rewards required for Perp launch is: $225k - $350k
This is the third vote in a series of votes for this AIP.
The vote will be a single choice where you can choose the $ amount to allocate for Perp’s incentives.
- Option1: 850,000 ALPACA (~$225k)
- Option2: 1,000,000 ALPACA (~$275k)
- Option3: 1,200,000 ALPACA (~$325k)
- Option4: 1,300,000 ALPACA (~$350k)
- The community voted to allocate 850,000 ALPACA (~$225,500) for Perp’s incentives.