ALGX Liquidity Rewards Program

Updated: December 23rd, 2022

Overview

This program incentivizes users to provide high quality liquidity to the Algodex platform.

The Mainnet rewards program is available to users who trade or have traded verified asset pairs on Algodex. The Mainnet rewards is currently in version 2, and is ongoing.

Users can sign up for rewards on rewards.algodex.com. After a user connects their wallet, they will be eligible to receive rewards distributions, as well as view rewards earned in historical periods.

Users who have high market maker uptimes and keep orders close to the current bid/ask spread will receive the most rewards. Total liquidity is a factor, however it is weighted less as a factor in the calculation of rewards.

Liquidity Rewards Formula

Liquidity Rewards Details

Minimum Depth

Orders below a certain minimum depth size per market are excluded. The US dollar amounts are calculated by applying the current ALGO-USD exchange rate.

Initial Maximum Spreads

For Mainnet Version 1 the maximum spreads are 1000 bps (10%).

Mainnet Version 2 is broken up into grades and are applied to each order:

Liquidity Rewards Tiers & Corresponding Rates

These rates apply to both versions of the Mainnet reward plans.

Reward Calculation

360,000,000 is the total supply of ALGX allocated to the rewards program.

Liquidity Rewards FAQ

How can I claim my rewards?

Rewards will be automatically calculated and distributed to eligible wallets.

Where can I sign up and track my rewards?

The official rewards app has launched, and can be found at rewards.algodex.com. Users will be required to complete a simple sign-up process on the app after connecting their wallet. This sign-up process will require users to send an amount of 0 ALGO to themselves as proof of their participation.

What is mid-market spread?

The spread between the highest qualifying bid price, and the lowest qualifying ask price in a given market. The mid-market spread takes the midpoint of the market. Qualifying criteria on bid and ask depth can be found here.

i.e., A bid price is $4,000 and the ask price is $4,100. The bid-ask spread is therefore $100, and the mid-market price is $4,050. Therefore, the mid-market spread is $50.

A user's spread is defined as the distance between their order's price and the midpoint of the lowest ask and highest bid on the orderbook.

Exchange Rate

Due to the volatile nature of cryptocurrency, this document provides details in terms of US dollars. The Algodex platform does not use US dollars, and instead uses Algo. Therefore, ALGO prices will be compared with the most current ALGO-USD exchange rate while calculating user eligibility.

Vesting and Reward Distributions

There is no vesting schedule for rewards. Once the rewards app launches, users will receive their rewards within 2 days of the end of the most recent period. Historical rewards that were earned before the release of the app will be distributed when the app launches.

The official rewards launch date is TBD, however, it will coincide with the rewards web app launch.

Is the rewards code open source? If so, where is it located?

The code is open-source, written in Rust, and can be found on GitHub here.

AssetGrade Multipliers

This is the current list of assets that receive multipliers:

  • USDC/ALGO = 3x

  • STBL/ALGO = 3x

  • STBL2/ALGO = 3x

  • goBTC/ALGO = 3x

  • goETH/ALGO = 3x

  • gALGO/ALGO = 3x

  • goMINT/ALGO = 3x

  • USDT/ALGO = 3x

  • GARD/ALGO = 3x

  • pTokens BTC/ALGO = 3x

  • xSOL/ALGO = 3x

  • goUSD/ALGO = 3x

  • ALGX/ALGO = 2x

All other assets eligible for rewards receive no multiplier.

Example Calculations

Assume a liquidity providers has multiple open bid orders in the goETH market: 1goETH at $3,900; 5 goETH at $3,850; 10 goETH at $3,500. Assume goETH is currently trading at $4,000 (based on mid-market). Assume the minimum depth (for both bid and ask) is $100. Assume maximum spread is 100 bps (1%) and mid-market is $25; therefore, maximum spread vs. mid-market is \frac {$25}{$4,000}=62.5 bps.

Note that all terms are included, as no term violates the maximum spread or minimum depths rules.

Assume a liquidity providers has multiple open ask orders in the goETH market: 1goETH at $4,100; 5 goETH at $4,150; 10 goETH at $4,175. Assume goETH is currently trading at $4,000 (based on mid-market). Assume the minimum depth (for both bid and ask) is $100. Assume maximum spread is 100 bps (1%) and mid-market is $25; therefore, maximum spread vs. mid-market is \frac {$25}{$4,000}=62.5 bps.

Note that all terms are included, as no term violates the maximum spread or minimum depths rules.

1. Mainnet Rewards - Version 1 [February 10, 9:00:00, 2022 - June 2, 23:59:59, 2022]

2. Mainnet Rewards - Version 2 [June 3, 0:00:00, 2022 – ongoing]

Eligibility

To be eligible for Mainnet rewards, the user must trade, or have traded verified asset pairs on Algodex between February 10, 9:00:00 and June 2, 23:59:59, for the original rewards system, or June 3, 0:00:00 and ongoing, for the improved rewards system. The rewards from Mainnet can be accrued by anyone committing the criteria.

Terms

All specifics outlined in the above rewards plan are subject to change without notice.

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