HP013 - Month #1 Incentives

This proposals seeks to:

  • Allocate 0.4% of the Total Token Supply to Liquidity Mining incentives for the AVAX-PERP vAMM for the first month of its trading.
  • Allocate 0.2% of the Total Token Supply to Trading Incentives.
  • Allocate 1000 HSC as incentives for Top Traders, Makers and Insurance Providers.

The vHubble System

Motivation

For each protocol, the three most important variables are:

  1. Protocol.
  2. Community.
  3. Liquidity.

The primary objective of this governance proposal is to secure liquidity.

Hubble Exchange does not yet have a token which poses an interesting challenge when it comes to garnering liquidity. How does an exchange secure its liquidity without a token?

The Voucher System exists to address this challenge.

Vouchers are token-convertible instruments which represent exact future ownership in the DAO. As interest rates rise across the board in an uncertain economic environment, capital gets more expensive and the market for liquidity becomes more competitive. A transparency in rewards enabled through the Voucher System, hereafter known as vHubble, allows Hubble Exchange to compete for liquidity more effectively.

Overview of vHubble

Each vHubble will be exchanged for Hubble Exchange Tokens in a 1:1 ratio in the future. The following vesting will be applied to vHubble owners:

  • 70% of all vHubble will be unlocked at the Token Generation Event (TGE).
  • 15% of vHubble will be vested over 6 months, starting TGE.
  • 15% of vHubble will be vested in the form of Key Performance Indicator (KPI) options, executable when cumulative trading volume is over $5B USD.

The KPI options will be minted at TGE.

vHubble have a few key characteristics:

  • vHubble are Non-transferrable.
  • Are off-chain and;
  • Hold no Governance Power until TGE.

Liquidity Mining Incentives

At launch, Hubble Exchange will support the AVAX-PERP market only. The only depositable assets will be AVAX, USDC and Hubble Virtual USD (hUSD). Although USDC will be depositable, it is important to note deposited USDC will be used to mint Hubble Virtual USD (hUSD) which would be used as collateral.

The incentives are for Makers to provide liquidity in the AVAX-PERP vAMM.

Key details:

  • AVAX-PERP Market
  • Duration: 4 weeks
  • Pool capped at $10,000,000
  • 4,000,000 vHubble (0.4%)

Ignition Period

The Ignition Period exists to ensure there is sufficient liquidity within the vAMM before trading begins, protecting the trading experience from high slippage. During the Ignition Period, no trades can be made on Hubble Exchange. It’s a period during which the protocol only gathers liquidity. Once the liquidity threshold is met, the Ignition Period ends, trading begins and Liquidity Mining incentives start. Once liquidity is deposited in the Ignition Period, it can only be withdrawn once the ignition period ends. Withdrawing liquidity from the vAMM has a variable 2-3 day unbonding period.

The threshold for trading to begin is $5,000,000 USDC or once 24 hours have elapsed - whichever comes first.

Ignition Period Incentive Booster

Makers have the ability to multiply their liquidity mining rewards by participating in the Ignition Period. These multipliers exist to incentivize individuals to become early providers of liquidity during this critical period. The first one million in provided liquidity will earn a 2x reward multiplier, the second million will earn a 1.8x reward multiplier, third million will receive a 1.6x reward multiplier and so on.

  • First $0-$1M - 2x reward multiplier
  • $1M-$2M - 1.8x reward multiplier
  • $2M-$3M - 1.6x reward multiplier
  • $3M-$4M - 1.4x reward multiplier
  • $4M-$5M - 1.2x reward multiplier
  • $5M-$10M - 1.00x reward multiplier (no multiplier)

Makers who provide liquidity early will earn the largest multipliers for their liquidity mining rewards.

The booster in incentives assigned to these Makers shall expire if they withdraw their liquidity or if a future governance proposal decides to remove the multiplier reward.

Trading Incentives

The trading Incentives are proposed to be split amongst two types: volume rewards and open interest rewards. The rewards for each are split amongst two pools, one for retail traders and bots and one for retail traders only. Traders are eligible to receive rewards in both pools.

1. Traders and Bots (85%)

In this pool, swaps done directly through the UI will be covered and swaps that are not made through the exchange interface will also be eligible.

2. Traders only (15%)

In this pool, only swaps done directly through the UI will be covered.

Volume Rewards

Total Allocation: 0.1% (1,000,000 vHubble)
Weekly Cap: 0.025% (250,000 vHubble)

Traders will be eligible for all volume rewards, but a total of 15% of the volume rewards will be reserved in a pool for traders only, to which bots will not be eligible.

Duration: 4 weeks.

The volume rewards are distributed based on the volume traded by a trader during the duration of the month relative to the total volume in the month.

Volume by trader / total volume * Rewards

Open Interest Rewards

Total Allocation: 0.1% (1,000,000 vHubble)
Weekly Cap: 0.025% (250,000 vHubble)

Similar to volume rewards, traders will be eligible for all open interest rewards, but a total of 15% of the open interest rewards will be reserved in a pool for traders only, to which bots will not be eligible.

Duration: 4 weeks.

A trader’s open interest is the USD value of all their open positions.

Trader’s average open interest / Sum of all Traders’ Avg. Open interest

A trader’s open interest will be measured every minute (at a random time in each minute). The trader’s Average Open Interest would be determined during the duration of the incentives (4 weeks).

Hubble Space Cat Incentives

In total, 1000 HSC will be allocated to Top Traders, Makers and Insurance Providers as incentives.

Trading HSC Incentives

Total Allocation: 600 HSC
Weekly Allocation: 150 HSC
Duration: 4 Weeks

The top 150 traders, ranked by volume, will receive 1 HSC each week.

Only swaps done directly through the UI will be covered to specifically target retail traders and not bots.

Insurance Fund HSC Incentives

Total Allocation: 248 HSC
Weekly Allocation: 62 HSC
Duration: 4 Weeks

The top 62 insurance funders will be rewarded 1 HSC every week.

An insurance funder’s supplied liquidity as a ratio to the total funds in the insurance fund will be measured every minute (at a random time in each minute). Using these data points, the Insurance Funder’s Average Supplied Liquidity will be determined each week. The Insurance Funders would then be ranked according to their Supplied Liquidity. The top 62 will be chosen.

Maker HSC Incentives

Total Allocation: 152 HSC
Weekly Allocation: 38 HSC
Duration: 4 Weeks

The top 38 Makers, ranked by liquidity supplied, will be rewarded 1 HSC each week.

Each Makers’ supplied liquidity as a ratio to total supplied liquidity will be measured every minute (at a random time in each minute). Using these data points, the Makers Average Provided Liquidity during the week will be determined. The Makers would then be ranked according to their Avg. Provided Liquidity for the top 38 to be chosen.

Acknowledgements

The following individuals contributed valuable advise during the formulation of these incentives: theteatotaller#2063, threesigma#7713 and Siddharth Jain.

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0 voters

14 Likes

Many thanks, i love all hubblers!

2 Likes

Absolutely yes, LFG!

1 Like

thanks to everyone have voted

Thank you everyone who voted! #StayHubble

Конечно за! Всем привет👋

There was a slight correction needed in the multiplier rewards. The amendment has been made.

Done. Lets start the party.

its happening, go cats go!

Nice, Thanks Hubble Team

look interesting, i voted a big yes

Done, let’s go guys!!!