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31min

Maker Incentive Program

๏ปฟLast updated: 15 March 2023

๏ปฟ

Introduction

๏ปฟ

To encourage market makers to provide liquidity to specific markets on Drift, qualified market makers can earn up to USDC $2,000 a week per market with this Program.

Who Can Join?

Anyone that can programmatically market make on Drift is invited to apply for the Program. Check out our protocolโ€™s SDK and our open sourced market making bots to get started.

Eligible market makers will be qualified on application. Reach out to our Head of BD (https://t.me/thedamoo) to apply.

Apply today and earn up to $2,000USDC per market in weekly cash rewards.

What Markets are Qualified?

Note: This is subject to change.

The Program applies to the following markets on Drift:

  • SOL-PERP
  • BONK-PERP

Rewards are per market. Qualified market makers can earn up to $4,000USDC if they qualify as Tier 1 in both SOL-PERP and BONK-PERP markets.

Program Length

  1. The Program will run each week starting on Monday, 00:00 UTC and concluding on Sunday, 23:59 UTC (โ€Program Periodโ€).
    • The first date for this program will be 00:00 UTC Monday, 6 March 2023.
  2. Auto-renewal of the Program is not guaranteed. Drift will notify participating market makers if the Program is paused for any particular week.
  3. This Program will conclude on 00:00 UTC Friday, 31 March 2023.

Rewards

๏ปฟ

SOL-PERP

In addition to the standard 2bps rebate for all market maker orders on Drift, we are offering Qualified Market Makers in the SOL-PERP market an additional payment of:

  • Tier 1: $2,000 USDC
  • Tier 2: $600 USDC
  • Tier 3: $200 USDC
  • Tier 4: $100 USDC

Tier

Min Maker Score

Min Maker Volume

Min Up-time

Award

Tier 1

Highest MM Score

Top Maker Volume

90%

$2,000 USDC

Tier 2

2nd Highest MM Score

3m

85%

$600 USDC

Tier 3

3rd Highest MM Score

2m

80%

$200 USDC

Tier 4

4th Highest MM Score

1m

80%

$100 USDC

BONK-PERP

In addition to the standard 2bps rebate for all market maker orders on Drift, we are offering Qualified Market Makers in the BONK-PERP market an additional payment of:

  • Tier 1: $2,000 USDC
  • Tier 2: $600 USDC

Tier

Min Maker Score

Min Maker Volume

Min Up-time

Award

Tier 1

Highest MM Score

Top Maker Volume

90%

$2,000 USDC

Tier 2

2nd Highest MM Score

First or Second Highest Maker Volume

85%

$600 USD

Note: see subheading 'Score Calculation' below.

Qualification Requirements

๏ปฟ

Volume Qualifications per Tier

In order to qualify for the particular tiers, market makers must:

  • Tier 1: be the #1 contributor in maker volume across the Program Period.
  • Tier 2: 3m in maker volume across the Program Period.
  • Tier 3: 2m in maker volume across the Program Period.
  • Tier 4: 1m in maker volume across the Program Period.

Minimum Up-time Qualifications per Tier

Market makers must maintain a baseline minimum up-time of:

  • Tier 1: > 90%
  • Tier 2: > 85%
  • Tier 3: > 80%
  • Tier 4: > 80%

Up-time is measured by tracking the market maker's bid and offer prices and determining the percentage of time that they have a bid and offer active within 20bps of the best bid and offer.

The minimum up-time requirement will be calculated based on this percentage of presence over the Program Period.

If at any time, the Solana blockchain goes down or becomes unreliable, those snapshots will be removed from the calculation of the market makerโ€™s up-time.

Note: Market makers that qualify for the reward but do not meet the minimum volume or up-time qualifications will forfeit that award. The award will not be passed onto the next ranking market maker.

๏ปฟ

E.g. The top scoring market maker will not be rewarded if, during the Program Period, they are not (a) the market maker with the most volume made; and (b) maintained an up-time of over 90%.

Score Calculation

๏ปฟ

Minimum Liquidity Depth

There is minimum liquidity depth prescribed for the cumulative value of orders within a particular bracket (i.e. A1, B1, A2, B2... etc). That value is:

  • Bid and Ask: $5,000

If a maker's cumulative liquidity provided within that particular bracket is less than $5,000, then the calculation of their score for that particular bracket will be penalised.

Depth Multipliers

  • Your score is based on the size of your post-only limit orders placed as a proportion to the total liquidity placed within that bracket.
  • Multipliers are applied to award a higher weighting to liquidity provided closer to the best bid & ask price.

Average Score

  • Random snapshots will be taken each day.
  • The market makerโ€™s daily score will be an average of its scores calculated across that dayโ€™s snapshots.
  • The market makerโ€™s average monthly score is calculated as the average of its daily scores.

Formula

Scores are calculated according to the following formula:

Maker Score Calculation Formula
Maker Score Calculation Formula
๏ปฟ

Note: Orders that qualify for one bracket will be ineligible for another bracket

Term

Meaning

Term

Meaning

A1

Size of MMโ€™s orders within 1bp of the best ask price

A4

Size of MMโ€™s orders within 10bps of the best ask price

B1

Size of MMโ€™s orders within 1bp of the best bid price

B4

Size of MMโ€™s orders within 10bps of the best bid price

A2

Size of MMโ€™s orders within 3bps of the best ask price

A5

Size of MMโ€™s orders within 15bps of the best ask price

B2

Size of MMโ€™s orders within 3bps of the best bid price

B5

Size of MMโ€™s orders within 15bps of the best bid price

A3

Size of MMโ€™s orders within 5bps of the best ask price

A6

Size of MMโ€™s orders within 20bps of the best ask price

B3

Size of MMโ€™s orders within 5bps of the best bid price

B6

Size of MMโ€™s orders within 20bps of the best bid price

Term

Meaning

Term

Meaning

Q1

Average of the total bid and ask liquidity within 1bps of the best bid & ask.

๏ปฟ

There is a lower bound that is calculated as $5000 divided by the average of the total bid and ask liquidity within 1bps of the best bid & ask, divided by 2.

Q4

Average of the total bid and ask liquidity within 10bps of the best bid & ask.

๏ปฟ

There is a lower bound that is calculated as $5000 divided by the average of the total bid and ask liquidity within 10bps of the best bid & ask, divided by 2.

Q2

Average of the total bid and ask liquidity within 3bps of the best bid & ask.

๏ปฟ

There is a lower bound that is calculated as $5000 divided by the average of the total bid and ask liquidity within 3bps of the best bid & ask, divided by 2.

Q5

Average of the total bid and ask liquidity within 15bps of the best bid & ask.

๏ปฟ

There is a lower bound that is calculated as $5000 divided by the average of the total bid and ask liquidity within 15bps of the best bid & ask, divided by 2.

Q3

Average of the total bid and ask liquidity within 5bps of the best bid & ask.

๏ปฟ

There is a lower bound that is calculated as $5000 divided by the average of the total bid and ask liquidity within 5bps of the best bid & ask, divided by 2.

Q6

Average of the total bid and ask liquidity within 20bps of the best bid & ask.

๏ปฟ

There is a lower bound that is calculated as $5000 divided by the average of the total bid and ask liquidity within 20bps of the best bid & ask, divided by 2.

  • Worked Example
    • Here, weโ€™ve averaged the total bid & liquidity (Q) from a snapshot of the OB to the right.
    • We have then estimated (on the lower end) the qualified MMโ€™s min bid/ask order size.
    • Applied the equation above and the MM arrives at a score of 76.62
    • Qualified MM gets Tier 1 of the Reward (provided they traded the most maker volume over that same period)
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Additional Terms

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  1. Any wash trading or self matching is strictly prohibited. If wash trading or self matching is observed in order to manipulate market share, then the incentives for that month are forfeited. This is at the sole discretion of Drift Protocol.
  2. Market makers will be able to track their performance here: ๏ปฟDrift Maker Performance๏ปฟ

Payment Options

๏ปฟ
  1. Qualified Market Makers will receive their payments in USDC.
  2. Payout will be at the conclusion of the Program contingent on passing the Qualification Requirements.

๏ปฟ

Updated 30 Mar 2023
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TABLE OF CONTENTS
Introduction
Who Can Join?
What Markets are Qualified?
Program Length
Rewards
SOL-PERP
BONK-PERP
Qualification Requirements
Volume Qualifications per Tier
Minimum Up-time Qualifications per Tier
Score Calculation
Minimum Liquidity Depth
Depth Multipliers
Average Score
Formula
Additional Terms
Payment Options