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Trading Rewards
To incentivise trading activity and market liquidity on the Lyra Protocol, a maximum of 3,600,000 LYRA (0.36% of supply) will be distributed to users who trade on the protocol over the next 3 rounds based on:
  1. 1.
    The cumulative fees that they pay to LPs
  2. 2.
    The cost of locking capital to collateralise option selling
LYRA will be distributed to traders according to the rules established by the Council in LEAP-8. Please note that 'long' or 'short' positions are defined by whether the trader is buying or selling options, not on the directional bet of their trade.

Rewards Cap

The rewards earned by traders within each round and per asset (ETH, BTC, LINK) are capped. If the cap is reached, then the total LYRA rewards will be distributed to traders proportionate to the rewards they earned.
Example: If the cap for a round is 2,000,000 LYRA, and Alice has earned 1% of the total rewards in the round, then:
  1. 1.
    If the cap is reached, Alice would earn 20,000 LYRA.
  2. 2.
    If the cap is not reached, and only 1,500,000 LYRA has been earned by traders in the round, then Alice would earn 15,000 LYRA.
The caps for each round (per asset) are displayed below:
Round
Duration
ETH Trading Rewards Cap
BTC Trading Rewards Cap
LINK Trading Rewards Cap
1
November 5 - November 19
360,000 LYRA
360,000 LYRA
80,000 LYRA
2
November 19 - December 10
540,000 LYRA
540,000 LYRA
120,000 LYRA
3
December 10 - January 7
720,000 LYRA
720,000 LYRA
160,000 LYRA
LEAP-8 outlines the trading rewards program up until January 7th 2022, at which point a new rewards structure will have to be determined by the Council.

Trading Fee Rewards

The following rates represent the maximum rate if the cap is not reached (per asset, round).
  • Long positions (the purchase of a call or a put) will earn 0.35 LYRA per $1 of fees paid
  • Short positions (the sale of a call or a put) will earn 0.45 LYRA per $1 of fees paid

Short Collateral Rewards

To incentivise traders to take short options positions on the protocol, a rate in LYRA tokens will be paid on short collateral. The rate paid will differ slightly for sUSD collateral and sETH, sBTC and sLINK collateral. The following rates represent the maximum rate if the cap is not reached (per asset, round).
  • rate A: LYRA Liquidity Pool reward rate at start of the round * 2/3 * time short position held: for dollar denominated collateral (denoted as rate A, quoted in LYRA per $1000 per day)
  • rate B = LYRA Liquidity Pool reward rate at start of the round * 2/3 * (ETH Price at start of round/$1000) * time short position held: for ETH denominated short collateral (denoted as rate B, quoted in LYRA per ETH per day)
The rate for each short collateral will be 2/3 of the rate of the corresponding liquidity pool, i.e. sETH shorts will earn 2/3 of the sETH option market LPs. These rates are deliberately less than the rate for Lyra LPs. This is to drive liquidity to the Lyra options AMM and compensate LPs for their relative lack of flexibility, as funds are locked for the duration of the round.
Example: At the commencement of the round, the ETH price from the Chainlink Oracle feed was equal to $4,000. The Liquidity Pool rate is equal to 10 LYRA / $1000 / day. Alice opens a short call position, collateralized with 1 ETH, and holds for 20 days. Alice is entitled to short collateral rewards worth:
RateB=RateA(ETHprice/1000)timeHeld=10(4000/1000)20=800LYRARate B =RateA * (ETH price/1000)*timeHeld=10 * (4000/1000) * 20 = 800 LYRA
Last modified 24d ago