LEAP-34: Simplifying Trader Rebates

Author
StatusApproved
Created2022-09-05

Simple Summary

Simplify the fee rebates structure to improve UX by introducing flat tiers which map stkLYRA balances to fee rebate percentage.

Abstract

The current trading rebates system (a key piece of incentives/rewards), described in LEAP-26, uses a logarithmic function (with various weighting parameters) in order to scale a user’s rebate from the minimum 20%, to the maximum 60% of fees paid. This should be altered to a tiered system which is based on a user’s stkLYRA balance.

Motivation

Whilst theoretically sound, this mechanism is overly complicated and is difficult for new users to understand versus the more traditional tier model. In order to convey which rebates a prospective user is eligible for, a custom calculator would need to be built (which adjusts over time based on parameter/weighting changes), and said user would have to locate and use the calculator in order to understand their rebates. Compared to simply observing a tiered rebate table, this is extremely cumbersome.

Specification

The tiers for the new system are proposed in the below table (table with old system shown for reference). The Council can choose to alter these tiers from epoch to epoch, if necessary.

Old Program

stkLYRA Balance Rebate
0 20%
1,000 25.56%
5,000 32.48%
10,000 35.46%
20,000 38.44%
50,000 42.38%
100,000 45.36%
250,000 49.30%
500,000 52.29%
1,000,000 55.27%
2,000,000 58.24%
3,000,000 59.99%

Proposed Tiers

stkLYRA Balance Rebate
0 5%
1,000 20%
5,000 30%
10,000 35%
20,000 40%
50,000 45%
100,000 47.5%
250,000 50%
500,000 52.5%
1,000,000 55%
2,000,000 57.5%
3,000,000 60%

Rationale

This new system preserves the mathematical properties of the old system whilst being intuitive to understand and easy to relay. This simplifies onboarding and will therefore drive higher uptake of the rebates program.

Test Cases

N/A