HP019 - Adjusting Trading Rewards

This proposal seeks to:

• Reduce OI rewards by 50%
• Increase volume rewards by 50%

If this proposal passes, the new trading rewards would be:

• Open Interest Rewards: 500,000/mo (0.05%).
• Trading Volume Rewards: 1,500,000/mo (0.15%) Motivation

Currently, Hubble splits the rewards equally between Open Interest (OI) and Volume at 0.1% per month.

Important stakeholders for the exchange and their incentives are:

• Makers - Fees (0.075%)
• Rate arbitrageurs - funding rate, OI rewards, volume rewards
• Active traders - volume rewards, OI rewards

Naturally, volume rewards are lesser for rate arbitrageurs and OI rewards are lesser for active traders. Makers and the insurance fund earn the fee from active trading. A consistently higher funding rate allows traders who are running rate arbs to earn a decent yield. The only avenue for active traders to earn more, in this case, is the rewards. Therefore, it makes sense to skew trading rewards in favour of volume rather than keeping them equal for OI and volume.