KIP-128: Kwenta Experience Points

Simple Summary

Introduce a comprehensive points system to reward Kwenta users for their engagement, including both retroactive and ongoing contributions, with room for expansion for special campaigns.

Abstract

This proposal seeks to establish a Kwenta Points System, distributing points for trading, referrals, and a special incentive for established users of perps protocols. Points track the distribution of both ongoing weekly rewards and retroactive rewards at the time of $KSX token generation.

Motivation

This proposal aims to provide a framework for ongoing trading incentives on all integrations. The proposal aims to first set up a simple framework for tracking contributions through trading, implemented in a way which enables the tracking of additional contributions and defining rewards in the future.

This proposal also includes special incentives for 3 groups.

V3 testers are awarded extra points for their work testing the system, helping to reward those who take the largest risks in assisting Kwenta in identifying bugs and progressing the roadmap.
Active Perps Traders, identified by their trading history on perps exchanges, are incentivized in order to build awareness and attract the highest quality users to Kwenta.
Referral bonuses are included to provide ongoing incentive for referrals on all chains regardless of whether liquid rewards are available on the specific chain.

Specification

Kwenta Points will be called EXP. Users will complete specific onchain actions to earn points, with the option for adding offchain actions at a later date.

Seasons

Kwenta points will be accumulated for actions over the course of a season. At the end of each season, the balance of points will be recorded, bonus points applied, and a user’s points balance will begin at 0 for the following season.

Seasons differ from weekly epochs in that they do not have a set length, allowing seasons to be ended and begun to align with specific product initiatives.

Tiers

By accumulating EXP each season, users will achieve higher rewards tiers each time they cross a points threshold. Bonus EXP will be distributed based on a user’s achieved subtier at the end of the season.

Bonus EXP will be equal to 20% of the final subtier threshold. For example, a Tier 0 trader with 44 EXP at the end of Season 1 will receive 0 bonus EXP, 20% of the 0 needed to enter the tier. A Tier 4 (i) trader with 141,000 EXP will receive 20,000 EXP, which is 20% of the 100,000 needed to enter Tier 4. A Tier 5 (ii) trader with 2,500,000 EXP will receive 500,000 EXP, which is 20% of the 2,500,000 needed to reach that subtier. Bonus distributions are not cumulative and are only distributed based on the highest subtier achieved.

Tier 0: 0 - <100 EXP (No subtiers)

Tier 1: 100 - <1,000 EXP

(i) 100 EXP
(ii) 250 EXP
(iii) 500 EXP

Tier 2: 1,000 - <10,000 EXP

(i) 1,000 EXP
(ii) 2,500 EXP
(iii) 5,000 EXP

Tier 3: 10,000 - <100,000 EXP

(i) 10,000 EXP
(ii) 25,000 EXP
(iii) 50,000 EXP

Tier 4: 100,000 - <1,000,000 EXP

(i) 100,000 EXP
(ii) 250,000 EXP
(iii) 500,000 EXP

Tier 5: 1,000,000 - <10,000,000 EXP

(i) 1,000,000 EXP
(ii) 2,500,000 EXP
(iii) 5,000,000 EXP

God Tier (Tier 6): 10,000,000+ EXP (No subtiers)

For reference, a trader paying a 5bp maker fee on each ongoing trade who earns no other EXP will reach each tier threshold at the following notional volume. Keep in mind, this information is only for reference to aid in understanding the EXP threshold logic.

Tier 0: $0
Tier 1: $10,000+
Tier 2: $100,000+
Tier 3: $1,000,000+
Tier 4: $10,000,000+
Tier 5: $100,000,000+
God Tier (Tier 6): $1,000,000,000+

Rewards

For trades prior to May 23rd at 00:00 UTC:

Trading on Base v3: 40 EXP per $1 in feesPaid will be applied retroactively.

For trades on or after May 23rd at 00:00 UTC, rewards will include past trades and accumulate on an ongoing basis:

All integrations: 20 EXP per $1 in feesPaid

Note: Implementation should allow for changes in points allocations across integrations with future proposals.

Active Perps Trader Bonus:

For addresses found to have done $1m or greater historical volume before May 23rd, 2024 on any of GMX, Gains Trade, MUX, Vertex, or Synthetix v2 Perps frontend (including Kwenta), 10,000 bonus EXP will be awarded for completing $500 feesPaid in Season 1.

Query Results, Whitelist, Query:

Referral Rewards:

Affiliates earn 20% of the points of each trader they refer from all categories except referrals.

Manual EXP Distribution:

Implementation will allow for manual additions to EXP, allowing future expansions and special distributions of weekly EXP, to be specified at a later date through the KIP process.

Ending $KWENTA rewards on v2:

Passage of this KIP will trigger an end to all trading and affiliate rewards on v2 on Optimism. Inflationary rewards currently earmarked for v2 trading rewards will be diverted to the treasury for use in future distributions for EXP program participants, and will be distributed at the discretion of the treasury.

Rewards

Rewards will remain unspecified in this KIP, and will be distributed at the discretion of the treasury on a retroactive basis.