Proposal 26: Incentivize Early Professional Arbitragers

Status

approved

Motivation

Arbitragers play an important role in the V3 Ecosystem. They can reduce the AMM’s risk, provide liquidity and increase trading volume indirectly.

However, when the trading volume is not big enough, there is insufficient incentive for the arbitragers. Besides, arbitragers need to do some work to integrate their system with V3 AMM, which reduces their movitation to participate in the early days.

I suggest to incentivize the early arbitragers to integrate with v3.

Budget

2000 MCB

The MCB should be minted when V3 launches.

Rules

  1. Arbitrager shall write to contact@mcdex.io to apply and introduce himself and his professional arbitrage system.
  2. The MCDEX foundation shall review the application and reply to the qualified arbitragers.
  3. Arbitrager integrates his system to the MCDEX v3.
  4. MCDEX Foundation reviews the integration/adapter codes of the arbitrage and tests the arbitrager’s system. The test will be on both Arbitrum Testnet5 and mainnet.
  5. The Arbitrageurs’ system shall work on the first day of v3 launching and work fine in the following 30 days.
  6. The reward is sent to the arbitragers.

Reward Distribution

The reward is disturbed to the arbitragers according to the date he passes the integration test. The earlier the arbitrage passes the test, the more reward he will be distributed.

Rank Reward
1 800 MCB
2 400 MCB
3 400 MCB
4 100 MCB
5 100 MCB
6 100 MCB
7 100 MCB

Edit:

Proposed evaluation method of arbitrageurs:

  1. The team reviews the adaptor source code, which interacts with the LiquidityPool contract, to ensure the correctness of usage.
  2. The team reviews technical solutions and indicators. Please provide an introduction of the arbitrage method, hedging markets, the promised price deviation range, processing speed, downtime, etc. The team will continue to evaluate within 30 days after launching. The team may reject an arbitrage plan.
  3. Integration test: the team provides a separate Liquidity Pool, which will emulate tradings at some random time. It is required that arbitrageurs should trade against AMM to reduce AMM position within 1 minute after the obvious price deviation.
  4. After the above steps, 1/3 of the bounty will be paid. (according to the proposal, when MCB is minted after V3 launch)
  5. If the promised technical indicators are reached within 30 days after launching, 2/3 of the bounty will be paid.

NOTE: Arbitrageurs should trade against on-chain AMM instead of placing orders through Broker.

Any interest in the team creating open sourced arb bots for the community to help out with the arbitrage?

We’ve had a opensourced bot, check here - GitHub - mcdexio/gateway-api

Check the reference strategy here - GitHub - mcdexio/hummingbot: Hummingbot: a client for crypto market making

1 Like

Finlink Capital has passed integration phase one (step 1~3).

Crypto Ballers has passed integration phase one (step 1~3).

This post was flagged by the community and is temporarily hidden.

Since the governance has approved this proposal, we have minted tokens corresponding to the budget for arbitrager incentive in the near future.

The minting transaction hash is 0x212b6b463112c0ff46a80c43e76a89cfc429352a182155286ee82168b4048118.