Experience (XP)

Experience (XP) is the foundational rock on which the whole incentives program is built. XP accrual not only determines what behaviours are rewarded, but also their relative incentivization. It is useful to organise possible incentives within a table where columns and lines mediate between:

  • Incentivising Network liquidity vs Trading activity;

  • incentivising initial trading/staking by instantaneously earning XP vs holding a position over time by accruing XP over time (aka holding risk for potential yield)

XP for…Network Liquidity (LPs)Trading

Action based

- Staking

- Notional Traded

Holding based

- Keeping assets staked

- Open Interest - Funding Rate Velocity

These position on the table explains the purpose and goals of each incentive mechanism:

  1. the XP rate over staking incentivises LPs not only to stake, but also keep their assets staked, to provide liquidity to the Network;

  2. the XP rate over open interest incentivise traders to hold their desired exposure on Reya, rather than other venues, increasing the conversion of volume into open interest;

  3. the funding velocity XP, a new accrual mechanism which we explain below, incentivises traders to take and hold positions that help rebalance the passive pool;

  4. the notional XP match-up plainly incentivises traders to bring their trading volume over to Reya.

The balance between the different types of incentives will necessarily change with time, according to needs. But as a general principle, the action based incentives should be seen as temporary, working as a sort of ‘shock incentives’. The eventual aim is to converge to a holding-based only mechanism as the Network grows to self-sustaining levels and its built-in network effects are working.

XP distribution mechanisms

Action-based incentives

In a seminal stage such as Reya’s, direct action incentives can (and have been) very useful in creating momentum. While these will be phased out as the Network matures, we propose to keep the trading tied action incentives, with slight changes

Earning XP by trading

Traders can earn XP simply by putting in trades in Reya DEX. They get an immediate XP credit once the trade is executed.

  • Traders get a one-off XP credit of 0.5% to their traded notional before boosts. In other words, for each $200 notional traded, 1 XP are immediately credited.

In addition, for every trade a random boost is awarded, which can go as high as 100x.

Earning XP through Network Staking

The accrual here is over time - as covered in the “Hodling Incentives” below.

Holding Incentives

The main mechanism to distribute XP is the time-based incentivisation over risk positions through an XP rates.

Earning XP by Network Staking (LPs)

LPs earn XP just by depositing into the passive pool and holding their funds there. The passive pool is a fundamental component of Reya Network in general, and Reya DEX perp trading in particular.

  • The base XP rate for an LP deposit is 0.1% of nominal per minute. This means that, pre boosts, LPs earn 1XP for each $1,000 of their deposit every minute.

It is that easy. In addition to any return that the passive pool delivers, your XP will automatically accrue every second. They are permanently yours.

Earning XP by holding exposure

Traders earn XP by holding exposure to assets through time. We measure this exposure through Open Interest, as an approximation. The purpose of perp trading is that people invest in desired exposure to the underlying assets. This mechanism incentivises organic and genuine trading in Reya.

  • The base rate for open exposure is 0.01% of (approximate) Open Interest per minute, or 1 XP for each $10,000 per minute.

The notional here is approximate, because OI is approximated by multiplying a user’s actual base by a standardised price that is routinely updated. The standardised prices make it much easier for you to compute your XP accrual, and can also be used to incentivise trading in certain assets by setting the standardised prices different from market, for example.

For example, the standardised price of ETH might be 3,000, and BTC 70,000. By holding 10 ETH exposure and 0.5 BTC, each minute you accrue:

0.01%×(10×3,000+0.5×70,000)=6.5xp 0.01\%\times (10\times 3,000 + 0.5\times 70,000) = 6.5\mathrm{xp}

Note that OI is netted across margin accounts with the same wallet.

Earning XP by rebalancing trades

In addition to holding their desired exposure, it is extremely valuable that traders help rebalance the passive pool. The pool’s mechanism reacts in a way that traders can help rebalance the through hedged strategies (we will publish more on this soon). The most important instrument in this is the funding rate, which increases when the pool is net short and needs traders to go short, and decreases (becoming negative) when the pool is net long and therefore needs traders to go long. To incentivise this beyond the profits of a hedge strategy, traders can also earn special XP.

  • Traders earn XP equal to the difference in funding rate:

    α×standardizedPrice×base×(frt2frt2)\alpha \times \mathrm{standardizedPrice}\times \mathrm{base}\times (\mathrm{fr}{t_2}-\mathrm{fr}{t_2})

Note that there is no multiplication by time, and so this is different from funding fees: it accrues the differences of the funding rate, rather than the funding rate itself. In fact, depending if the exposure is long (base>0\mathrm{base}>0) or short (base<0\mathrm{base}<0) traders profit differently from the increases or decreases in the funding rate:

Funding rate increasesFunding rate decreases

Long Trader


Receives XP

Short Trader

Receives XP


For example, if the funding rate goes from 10% to 40% annualised while you hold a short exposure of -$10,000, you accrue 3000XP when α=10,000\alpha=10,000.

The funding rate mechanism can be a powerful way to earn XP: as we mentioned, there are generally strategies where you can get into the right exposure in Reya while hedging it with some other instrument and profit while earning your XP!

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