How to reward traders in a sustainable way

MCB, since inception, is distributed to those who have contribution to the platform.That’s why we enabled liquidity mining program. Liquidity providers are essential to the whole system since the liquidity can enhance trading experiences.

Traders are core users of the platform that I think we should somehow involve them in the game with MCB. But meanwhile, we don’t want to fall into the Trading is Mining loop. So Anyone has an idea to reward traders in a sustainable way?

4 Likes

Create two pools:

  • Profit pool
  • Loss pool

At the end of each week, MCB is rewarded proportionally to traders of each pool with 75% of allocated MCB going to the profit pool and 25% to the loss pool.

This stops wash traders from accessing rewards. It also acts as a form of “cashback” for losing traders and a competitive edge for profiting traders.

Example

2000 MCB weekly allocation

Trader A makes $1000 profit
Trader B makes $2000 profit
Trader C makes $500 loss

Trader B 2000 * 0.75 * 0.667 = 1000 MCB
Trader A 2000 * 0.75 * 0.333 = 500 MCB
Trader C (only loser) 2000 * 0.25 = 500 MCB

Obviously the real numbers would be very different.

2 Likes

Since the Gas Fees are covered for trades, it would maybe attract some more if the Gas Fees for deposits and withdrawls are covered, too, but by MCB Token. So every deposit or withdrawl gets “cashbacked” as followed: Actual Gas fee in USD / Actual MCB Price in USD = MCB reward

1 Like

Two programs.

  • ‘Trader Mining’ - (@mcbull’s profit and loss pool idea)
  • ‘Equity Mining’

‘Trader Mining’

  • Adding to @mcbull’s Trader Mining idea
  • Over the course of the next 1-5 years traders and liquidity providers should earn up to 50% of the total supply of $MCB, if not more.

‘Equity Mining’ is a long term incentivisation program for everyone who holds $MCB.

  • 100% - X of the platform fees should be used to provide liquidity to buy back and burn $MCB.
  • Where X is = to operational costs.
  • This also gives incentive to people to advertise the success of the platform as everyone can earn a piece of profits proportional to their stake. A true DAO.
  • Also just want to add that there should be no dividends. Only liquidity and buy backs + burn of $MCB supply. That way $MCB captures 100% of the value of the platform.
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Going to keep it simple from mine.

Trade volume based rewards

  • 1,000 MCB for reward for each of the 5 PERPs, spanning across every 2 weeks
  • The 2 weeks is aligned with the current mining periods to make alignment easier
  • Top 30 Traders in terms of volume qualify
  • Rewards are split according to volume size
  • Will encourage traders to trade other newer PERPs

so for the traders, they need to balance the MCB they get and transaction fee they paid?

Essentially yes.

They are incentivised to make big volume trades in fewer transactions to:

  • Reduce gas fee through multiple transactions
  • Compete to get a bigger proportion of the MCB reward allocated to them

We shouldn’t force them to make multiple trades at this juncture, especially since the fees are only going to get higher (driven from high gas cost). My only concern is whether the AMM provides deep enough liquidity for them (but that itself is covered in proposal #9).