EQUIP-8: Proposal on Cancelling Position Mining and Introducing Profit Rate Mining and Loss Compensation Mining in Equation v3

Since its introduction, position mining has played a significant role in attracting early traders to our platform. However, its appeal to new users has substantially decreased, and its drawbacks have become increasingly evident: many users open equivalent long and short positions solely for the purpose of mining, rather than engaging in actual trading. This form of mining activity does not contribute to the platform's development and urgently needs adjustment.

The upcoming Equation v3 will permanently eliminate trading fees, which is expected to strongly and continuously attract traders. To further enhance v3's appeal to traders, this proposal suggests cancelling position mining and introducing profit rate mining and loss compensation mining.

Principle of Profit Rate Mining:

Each week, all users with a positive profit rate will have mining quotas distributed based on the proportion of their profit rate. This mining method offers several significant advantages:

1. It allows all users, regardless of their capital size, to participate fairly in the mining competition.
2. It attracts genuine trading users.
3. It forms the basis for a trading competition that ranks users weekly by profit rate, rewarding top traders.

Principle of Loss Compensation Mining:

1. Allocate a certain percentage of daily EQU emissions to the Compensation Pool.
2. Compensate all eligible users who have incurred losses once every 30 days, distributing the compensation according to the proportion of each user's total loss for the current period. The maximum compensation can be up to 100% of the loss amount in EQU (calculated at the price at the time of compensation).

Eligibility for compensation is granted under the following condition, which is designed to prevent the 'fabrication' of losses by opening long and short positions at two different addresses). Specific algorithms and parameters may be adjusted according to actual situations: The opening amount multiplied by the holding time of the largest single position loss must be less than 20% of the sum of the opening amounts multiplied by the holding times for all positions. The formula is:

Opening amount of the largest loss position × holding time < 20% × ∑(opening amount of each position × holding time)

3. Any portion of the Compensation Pool that remains undistributed at the end of the current period will be carried over to the next period.

EQU Mining Allocation in V3

After the launch of v3, the mining quotas from v2 will be gradually migrated to v3. Upon completion of this migration, the final mining allocations in v3 will be as follows:

Type	Allocation
Loss Compensation Mining	30%
Profit Rate Mining	10%
Liquidity Mining	29%
Pool2 Mining	20%
EFC Member NFT	10%
EFC Connector NFT	1%

The vote on this proposal will begin at 14:00 UTC on April 25, 2024, and will last for two days.