Ladder
The Ladder runs continuously and is implemented to scale LVL incentives with trading volume on the platform. This incentivization of trader activity establishes a flywheel effect driving increased trading volume and fees at LEVEL. Ladder rewards are only distributed to the top 20 traders on a leaderboard, based on a trader’s fee contribution and their amount of LVL staked on the platform, whether in the LEVEL DAO or LVL Staking.
LVL incentives distributed for the Ladder are based on the total trading fees paid at LEVEL each day. The amount is capped at 20,000 LVL per day. Each ladder runs for one week, where the rewards allocated each day are summed to give the final weekly reward. A week lasts 7 days and starts at 2 pm UTC every Wednesday.
Once $100,000 of trading fees have been collected each day, a baseline reward of $20,000 in LVL is allocated to the rewards for the day. Additional rewards are allocated at $50,000 trading fee hurdles as revenue is collected throughout the day. Each of the hurdles reached corresponds to an additional $20,000 worth of LVL rewards.
- Level 0: Revenue = $100,000 → $20,000 worth of LVL rewards
- Level 1: Revenue = $150,000 → additional $20,000 worth of LVL rewards
- Level 2: Revenue = $200,000 → additional $20,000 worth of LVL rewards
- ...
- Level
n = (Revenue - $100,000) / $50,000Daily LVL Reward = n * $20,000 + $20,000 / LVL_TWAPWeekly LVL Reward = sum(past 7 days LVL Reward)
These rewards allocated per day are then summed to give a total reward allocation for the week in the Ladder.
Whenever you pay trading fees to the protocol, whether through executing a Swap or a Leverage Trading action, you automatically earn Ladder Points. Ladder Points are only assigned for paying fees on the trading platform, through the following actions:
- Executing a Swap
- Opening or increasing the size of a Leverage Trade position
- Closing or decreasing the size of a Leverage Trade position
- Having your Leverage Trade position liquidated
- Borrowing fee paid when increasing or decreasing a position
After each weekly Ladder period, only the top 20 traders in the leaderboard will be awarded LVL tokens. A trader’s ranking on the leaderboard is based on their amount of Earned Points.
- Earned Points are calculated based on a trader’s trading fee contribution to the protocol, multiplied by (1 + Boost) to increase their rewards
- The Boost is determined by a trader's total number of LVL tokens staked on the platform, whether in LVL Yield Staking or LVL DAO Staking. Every 10 LVL staked will translate to a boosting factor of 1 bps (0.01%). This corresponds to a 1% boost per 1000 LVL staked.
Earned Points = Trader Fee Contribution * (1 + LVL staked (by trader) / 100,000)
LVL rewards distributed to traders who achieved a top 20 spot are determined based on their ranking within the leaderboard. LVL rewards will be vested for 7 days before distribution. The table below shows the weighting of rewards distributed amongst the top 20 traders.
LVL (per trader) = Total LVL Rewards * Reward weight (trader ranking) / Total Reward weight
Rank | Reward weight | Reward weight (%) |
|---|---|---|
1 | 10000 | 28.41% |
2 | 6000 | 17.05% |
3 | 4000 | 11.36% |
4 | 3000 | 8.52% |
5 | 2500 | 7.10% |
6 | 2000 | 5.68% |
7 | 1700 | 4.83% |
8 | 1400 | 3.98% |
9 | 1100 | 3.13% |
10 | 800 | 2.27% |
11 | 600 | 1.70% |
12 | 500 | 1.42% |
13 | 400 | 1.14% |
14 | 300 | 0.85% |
15 | 200 | 0.57% |
16 | 180 | 0.51% |
17 | 160 | 0.45% |
18 | 140 | 0.40% |
19 | 120 | 0,.34% |
20 | 100 | 0.28% |
Total | 35200 | 100% |
A trader contributes $1,000 in fees each day in the week-long Ladder period and had 1,000 LVL staked on the platform throughout. As a result, they would have accumulated 7,070 Earned Points throughout the week and placed 10th on the leaderboard. From the table above, 10th place corresponds to 2.27% of the total rewards for the Ladder. If the total fees contributed to the platform each day were $300,000, then Level 4 would have been reached, equating to $100,000 in LVL rewards each day, or $700,000 LVL rewards for the week. As a result, the trader would have received 1,589 LVL for this particular weekly Ladder, if the LVL TWAP was at $10.
Earned Points = 7 days * 1,000 * (1 + 1000 / 100,000) = 7,070LVL (per trader) = (700,000 USD / 10 USD) * 0.0227 = 1,589 LVL
In order to disincentivize any potential recycling of staked LVL across multiple wallets, a 40 bps (0.4%) deposit fee exists on staking LVL tokens.
Last modified 7d ago