Overview

We're thrilled to present our Maker Incentives Program: an initiative designed to reward professional Market Makers (MMs) for their pivotal role in providing deep, tight, and reliable liquidity, contributing to our mission of delivering the best trading experience ever seen in DeFi.

Commencing March 4th, 2024, Zeta will allocate a substantial 3% of its upcoming token (👀) to incentivize whitelisted MMs over the upcoming year. Strategic distributions will unfold in epochs, guided by formulas considering a combination of requirements, including spread, depth, uptime, and volume per market.

Through the stimulation of healthy competition and the strategic distribution of revenue share via fee rebates, this customized approach initiates a powerful flywheel for liquidity, fostering trading volumes, and enhancing the perpetual trading experience for both makers and takers.

Eligibility Requirements

The program caters to institutional and professional traders actively shaping Zeta’s orderbook through market-making strategies. In order to direct rewards towards those making substantial contributions to Zeta’s liquidity and market dynamics, the following criteria are in place.

Maximum Spread per Market

Orders above a given market’s max spread won't generate a score.

Spread = abs(price − midpoint) / midpoint

Minimum Aggregate Depth per Market

In order to contribute to the scoring, orders must meet a specific minimum depth requirement set for each market.

Minimum Uptime per Market

Market makers must meet a minimum uptime of 80% over the epoch to be eligible for rewards for that market.

Minimum Volume Share per Market

Market makers must meet a minimum volume share of 1% of maker volume on that market to be eligible.

Incentives

Maker Liquidity Rewards

Participants meeting the specified requirements become eligible for rewards, distributed in the form of token incentives at the end of each epoch (28 days). During the first three months of liquidity bootstrapping, rewards receive a 50% boost, reaching 0.3% of the network, as an additional incentive to encourage early adopters.

*Incentives allocated in Epochs 1-3 will be distributed linearly starting 4 weeks after the TGE. Tokens earned during Epoch 1 will be made available for delivery 4 weeks after the TGE. Tokens earned in subsequent Epochs (Epoch 2, Epoch 3) will be released on a rolling basis, 4 weeks apart from each other.

Each market will have its own rewards pool weighted differently (Market Weightings = k), with starting weights as follows:

Subsequent weights will be decided by a governance vote.

Maker Rebates

Whitelisted MMs will benefit from a substantial 2bps rebate on all maker volume. This is designed to enable quoting tightly, sustain profitability, and alleviate concerns about being traded against at the top of the book.

Scoring Methodology

Each market's (i) rewards (R) are determined based on the share of Q-score across all participating MMs in that market, multiplied by the market weighting factor k:

The Q-score (Q) is a wholistic measure of liquidity that incorporates cumulative uptime, depth/spread and volume over an epoch:

Here, the depth/spread term (D) is a ratio that incentivizes depth linearly and spread quadratically, following this formula:

While the Uptime is indicated by the proportion of samples in which the MM has non-zero liquidity within the required range:

How To Participate

Eager to get involved? Fill out the Zeta Market Maker Sign Up Form. Our team will reach out to you, guiding you through the onboarding process and ensuring a seamless start to your participation.

Get ready for some awesome trading ahead!

Additional Resources

• Program Dashboard

• Maker incentives program - Docs