Transaction Mining Proposal

Transaction mining is a rewards program that aims to incentivize trading by returning a portion of trading fees to traders.

Perpetual Protocol transaction mining is scheduled to begin some time after mainnet launch. The following information is for reference purposes and may change as the proposal develops.

Motivation

  • Reward early traders with PERP to attract more traders to the system

  • Distribute PERP into the hands of users

  • Create a positive feedback loop for traders and stakers

  • Prevent wash trading

Proposal

  • Providing rebates for trading fees.

  • The Transaction Mining program will test run for 4 weeks after launch and will be evaluated further at that point.

  • Rewards will be paid in PERP, paid from the reward pool and vested for some period.

Reward Calculation Time

At the end of every week (Sun 00:00 UTC)

Off-Chain Process

  1. Perpetual Protocol aggregates all the trading fees paid by each trader in the given week.

  2. Each trader is rewarded a USD-denominated value of PERP based on a percentage of their aggregated trading fees.

    1. The 1-week TWAP USD price for PERP will be used to calculate the reward amount.

  3. The rewarded PERP tokens are capped per week. Once the rewarded PERP > the cap, the rewarded PERPs will be proportionally distributed to stakers.

  4. The PERP rewards will be locked on-chain for some period. The locked rewards would not be stakable in the Staking Pool.

  5. Perpetual Protocol pays each staker by submitting one or more on-chain transactions.

  6. Perpetual Protocol will publish weekly trading stats.

Pros and Cons

  • Pros

    • Traders earning PERP โ†’ more fees โ†’ more Insurance Fund / more yield for stakers โ†’ more demand for PERP โ†’ more exposure for the protocol โ†’ traders earning PERP

    • Perpetual Protocol is giving taker rebates, encouraging traders to trade, and it also disincentivizes wash activity because of the USD-denominated value of PERP and the locked-up period

    • Off-chain process thatโ€™s easy to update

  • Cons

    • Need a reliable TWAP price before it launches

Parameters Updatable by Governance

  • The total amount of PERP to be used as transaction mining rewards

  • The reward vesting (lockup) period

  • The percentage of trading fees to be granted as PERP rewards