Liquidity Providers are automatically scored and ranked on performance
Scoring based on: Total Fees accrued over the Epoch duration
Scoring is conducted over Epochs that last 2 weeks
All rewards are distributed following the end of an Epoch and vest over 7 days
Partners can also utilize the program for an efficient way to distribute emissions
What is the Rewards Program?
The LB Rewards program offers additional token rewards, such as JOE, to incentivize Liquidity Providers to provide liquidity. To qualify for these extra rewards, Liquidity Providers need to achieve a high enough 'MakerScore' in comparison to other providers, also known as 'Makers.' The program serves as a competitive incentive scheme aimed at encouraging efficient liquidity management.
By adding a competitive element to liquidity incentivization, the program fosters a player-versus-player (PvP) approach as Makers compete to capture the most trading fees, thereby enhancing the efficiency of the rewarded Liquidity Pools. Only the top-performing Liquidity Providers receive rewards, which helps to keep emissions usage sustainable compared to existing liquidity incentive schemes.
Detailed overview of the LB rewards program
How to Earn Rewards
Liquidity Providers are scored and given a
MakerScore is calculated using the fees collected by the Liquidity Pool over a defined epoch. Therefore, as a Liquidity Provider when participating in this program, the more fees you earn over the duration the higher your
MakerScore will be.
How is the MakerScore calculated?
MakerScores are calculated independently off-chain for each rewarded market over the epoch duration. As an example, if an Epoch lasts for 14 days, the
MakerScore will be calculated over that specific period of time. Rewards are distributed based on each participant’s relative performance against all eligible LPs (for each market).
TLDR: How to qualify for rewards?
You must accrue enough trading fees to finish in the Top 30 of the Leaderboard. The more fees you accrue and the higher your score relative to other Makers, the more rewards you will earn.
MakerScore Breakdown: MakerFees
TLDR: Accruing Fees you will increase your MakerFee score and thereby if you accrue more Fees v other Liquidity Providers, you will rank higher and unlock more rewards.
The most important market contribution of an LP is the volume that they support/generate. LPs are rewarded with fees on swaps against the liquidity that they provide, so fees can be used in place of volume as a participation metric. Further, the dynamic fee mechanics incorporated in LB increase fee rates during volatile conditions (ie for filling large orders). Therefore, LB fees themselves are an excellent measure of the market activity for an LP. Fees represent volatility weighted volume and serve as the first term in the
To be eligible for rewards, Liquidity Providers must place in the top 30 by total fees accrued for each respective Liquidity Pool, over the total duration of the Epoch.
Epoch Durations and Rewards
Participation is evaluated over Epoch defined time periods, such as 1 week - 4 weeks. Epoch start/end dates will be announced before they begin, along with the reward amounts allocated to each Epoch and participating Liquidity Pool.
LB Rewards are siloed by market for each epoch. Reward amounts will be announced prior to the epoch’s start.
MakerScores are calculated independently for eligible LPs and rewards are distributed based on their proportional
MakerScore in each market.
Partner rewards may also be used to incentivize liquidity in LB markets. The LB Reward program provides a market maker scoring rubric and generic reward distribution for those incentives. Contact BD to explore partnerships.
LP rewards will be calculated off-chain and distributed by a smart contract, users will be able to claim their rewards directly from the UI on the DEX in a similar process to collecting farm rewards. Any rewards distributed will vest over a specified duration, typically this will be the same duration that the epoch ran over. EG If the epoch was 1 week, the rewards will vest over 1 week. Maker scoring and rewards calculations will be completed off-chain but will be published for community review.
Eligible Liquidity Pools
All Liquidity Pools that are marked with 'Rewards' are part of the rewards program for the current epoch. An example of 'Rewards' pools can be seen in the below image.
Rewards and the Leaderboard Feature
Epoch rewards can be viewed by clicking on the 'Leaderboard/Rewards' tab located on each Liquidity Pool page. The total rewards allocated per day are highlighted in the UI. For rewards designated for Liquidity Providers, this page also serves as the collection point for vested tokens.
This feature tracks the top 30 Liquidity Providers based on total fees earned over various time frames, ranging from 24 hours to 30 days. The Leaderboard serves as a performance indicator for each Epoch, helping you monitor the top Liquidity Providers positions.
By unlocking rewards in any given Epoch, users will automatically start to build up a 'Market Maker' community rank. To get started, you must connect your qualifying Wallet to guild.xyz. This will unlock 'Market Maker Joe' roles in the Trader Joe Discord.
Place in the top 3 (by total JOEs rewarded) in any given Epoch to unlock the highest 'Market Maker' rank available.
These roles will provide various rewards such as:
Exclusive Discord Role and Emoji
Access to the Makers Club
Full Epoch Information (Dates, Rewards and Performance Data) can be found in the Trader Joe Discord in the Makers Channel