- Aelin Funding
- Synthetix Staker and Trader Token Distribution
- Sovereignty Phase
- OP Token Phase 0 Proposal
- Community Rewards
- Trial Liquidity Mining on Velodrome
Kwenta distributed 5% of the initial total token supply pre-inflation (15,668.65 KWENTA out of 313,373) via the Aelin protocol on Optimism. This provided Kwenta with funding for development. Pool contributors received vKWENTA which was directly interchangeable for KWENTA at launch. vKWENTA will not be stakeable or usable in Kwenta governance, it must be converted to KWENTA to be used within the DAO.
To facilitate the owed distribution of KWENTA tokens to SNX stakers and Synth traders, the Kwenta DAO hosted a two-week Aelin pool with 35% of the initial supply on November 1st, 2022 which enabled eligible addresses to acquire KWENTA with a 1-year vesting period.
1% of the KWENTA token supply at launch was allocated to the Sovereignty Phase trading competition, totaling 3,133.73 KWENTA tokens. All KWENTA distributed from this allocation are on a 1-year linear vesting schedule as described under the vesting mechanism. At least 1,000 addresses were eligible for at least 1 KWENTA, assuming adequate participation
Week 1-2 (Complete)
The Kwenta Sovereignty Phase began on February 14th with the launch of the KWENTA Aelin raise. Allocated to the Aelin Pool was 5% of the initial supply.
Week 3 (Nov 9th - Nov 15th )
On Wednesday, November 9th, Round 1 of the Futures competition commenced. The round one prize pool included 465 KWENTA.
Week 4 (Nov 15th - Nov 22th )
On Wednesday, November 15th, a second round of the Futures competition was held where everyone started on equal footing. The round two prize pool included 2383.73 KWENTA along with 100k $OP.
Week 5 (Nov 16th)
Kwenta will launch staking-trading rewards. Rewards will be computed off-chain and sent out weekly.
Week 6 (Nov 16th)
The Kwenta token launched. Pool contributors that participated in the Aelin raise and received vKWENTA or veKwenta will be able to redeem for KWENTA now. All rewards earned during the Sovereignty Phase were distributed to participants, with the exception of ongoing LP rewards.
Kwenta/ETH Pool
LP rewards were available for those that contribute to the Optimism Uniswap V3 KWENTA/ETH pool for the first four weeks. Liquidity incentives are reviewed at the end of the initial period and either continued as is, adjusted, or discontinued. 783.43 KWENTA were available for this opportunity.
Pool Details:
- Pool: $KWENTA/$ETH
- Fee Tier: 1%
- Reward: 0.25% of the initial supply (783.43 KWENTA)
- minPrice: 0
- maxPrice: Infinity
Kwenta is being distributed 900,000 OP tokens but is required to propose how the tokens will benefit the Optimism ecosystem. Kwenta will use the OP tokens to fuel development and incentivize trader migration to Optimism. Kwenta will leverage the OP token to drive Optimism adoption while relying on Kwenta’s tokenomics and unique product offerings to retain those users who migrate.
The proposal for Kwenta’s OP is as follows:
Distribution Breakdown
- Platform Migration Incentives 66%
- Competition Prizes 14%
- DAO Contributor Incentives 20%
Platform Migration Incentives Amount: 600,000 $OP
Tier 1 - Onboarding
Amount: 200,000 $OP
Reward per wallet for full completion: 80 $OP
Required actions:
- Deposit at least $1,000 in a cross margin account
- Open a position worth at least $100 notional volume using a limit order
- Verify authenticity in the Kwenta Discord
Tier 2 - Test Drive
Amount: 200,000 $OP
Reward per wallet for full completion: 80 $OP
Required actions: Complete Tier 1 requirements
- Make at least 4 additional trades of at least $100 notional volume each trade
- At least 2 total trades must be triggered stop loss or limit orders
- Generate a realized PnL of at least $100 in either direction
- Tier 2 actions must be completed within 21 days of the completion of Tier 1 actions
Bonus A - DYDX Trader Boost Amount: 100,000 $OP
Max reward per wallet: 40 $OP
Required actions:
- Complete Tier 1 requirements using a wallet which interacted with DYDX prior to September 1st, 2022 to earn 20 $OP.
- Complete Tier 2 requirements from a wallet which interacted with DYDX prior to September 1st, 2022 to earn 20 additional $OP. *September 1st, 2022 will be defined as beginning with ETH mainnet block 15449618.
Bonus B - Optimism Quest Boost
Amount: 100,000 $OP
Max reward per wallet: 40 $OP
Required actions:
- Complete Tier 1 requirements using a wallet which completed the Optimism Quest and received the NFT to earn 20 $OP
- Complete Tier 2 requirements from a wallet which completed the Optimism Quest and received the NFT to earn 20 additional $OP
Dependencies
All on-chain actions will be dependent on the launch of Kwenta cross margin functionality, currently scheduled for launch in mid-October, and users may begin completing on-chain actions immediately following this launch.
Users will be able to claim $OP tokens at a later date, which is dependent on the $KWENTA token launch and completion of the token claim UI.
Disqualification
The following actions may result in resetting a wallet’s progress on the tiered incentive program:
- Withdrawing from the cross margin wallet.
- Leaving the Kwenta Discord server.
The following actions may result in a wallet being permanently disqualified from the $OP incentives program:
- Removal from Discord due to being flagged as a bot or malicious user.
Maximum eligible users
Rewards from Tier 1 and Tier 2 will be awarded to the first 2,500 unique users to complete each individual bounty or bonus. Users must be eligible to receive rewards from Tier 1 in order to qualify for Tier 1 bonuses or Tier 2 rewards. Users must be eligible to receive rewards from Tier 2 in order to be eligible for Tier 2 bonuses.
In the case that 2,500 eligible users have completed Tier 1 actions and 21 days has passed, unallocated $OP may be reallocated to this program, or other incentive programs or marketing initiatives at the discretion of the treasury.
In the case that $OP tokens have not been claimed 180 days after the launch of the incentive program, tokens may be clawed back and used at the discretion of the treasury for future incentive programs or marketing initiatives.
Competition Prizes: 120,000 $OP
Method: Kwenta will be hosting 2 competitions to kickoff the launch of the Kwenta token. The OP token will be used to incentivize participation by being added to the prize pool.
DAO Contributors
Amount: 180,000 $OP
Method: Individuals who have contributed towards governance and development within the Kwenta DAO will receive 50% of the OP based on a Core Contributor-derived assessment of the value provided by the included members. 50% of the OP would put towards Kwenta devDAO bounties, incentivizing development on top of Kwenta and Optimism.
New Users
The above incentives will draw users to bridge to Optimism and have a meaningful experience in the ecosystem. Traders will be incentivized to experience a realistic trial of a new and competitive platform that can rival their favored perpetual futures platform. Builders will be incentivized to experiment with development on Optimism alongside a community of talented developers.
Retention
Trader Retention:
In addition to offering users an incentive to bridge to Optimism, traders who complete trades on Kwenta to unlock their OP will receive trading incentives in the form of KWENTA which remain locked for 1 year while still being stakeable (which includes additional trader rewards) creating a sticky flywheel of incentives. This, in addition to the unique offerings unavailable elsewhere (such as gold and silver perps) will ensure we retain users who come to Kwenta to claim their OP.
Builder Retention:
The devDAO is a component of Kwenta which hosts bounties for developer work. Of the existing 20 devDAO contributors, around than 20% of members sold their SNX compensation while the remaining 80% either held or staked their SNX and became further engaged with the development community on Optimism. Many new devDAO members have gone on to contribute to Lyra, Thales, OptiPunk, and other projects in addition to Kwenta. Over $100,000 USD worth SNX has been spent on devDAO bounties with 80 tickets being resolved by community members ranging from beginner level to advanced difficulty. We believe this trend will continue as devDAO momentum has steadily grown since its inception earlier this year.
Effectiveness Evaluation:
Kwenta’s inflationary model offers the treasuryDAO an opportunity to offer multiple rounds of migration incentives should they prove beneficial for the protocol. Using OP for migration incentives will enable Kwenta to gather data regarding the effectiveness of these campaigns and refine our tactics to maximize the impact they have.
Timeline & Requirements
Pre-Airdrop Requirements:
Once Kwenta has completed the launch of the KWENTA token, the OP Airdrop will be implemented. The KWENTA token plays a crucial role in retention, as outlined above. Audits are currently set to conclude in late June setting up the Kwenta DAO for a launch in early summer.
Airdrop Timeline: Traders from alternative chains who meet the criteria listed above will have a period of 6 months to claim their OP tokens. Afterward, any remaining OP tokens will be clawed back and used at the treasury’s discretion for future growth initiatives.
Co-incentives Kwenta’s ongoing trading incentives will follow the mechanism defined above in an upcoming KIP.
Kwenta will be offering KWENTA in the upcoming competitions alongside OP. There will be no change to the existing developer compensation model, OP will be used to fuel development alongside the existing proven model.
Below is a list of the roles that have provided value to the Kwenta DAO’s development and a recommended amount of Kwenta tokens to allot in total per NFT/role group and how many people are within that group. Rewards are additive.
- Elite Council (5) - 750 $KWENTA
- Treasury Council (3) - 450 $KWENTA
- Macro Token Audit (1) - 60 $KWENTA
- Admirals (7) - 225 $KWENTA
- Product Elites (5) - 200 $KWENTA
- OG Product Elites (3) - 21 $KWENTA
- Bounty Hunters (30) - 210 $KWENTA
- Community Developers (4) - 160 $KWENTA
- Outside Contributors (23) - 595 $KWENTA
- Kwenta Advisors (3) - 380 $KWENTA
- Kwenta Elites (30) - 900 $KWENTA
- Kwenta Competition NFT Holders (12) - 60 $KWENTA
- OG POAP (63) - 63 $KWENTA
- Marketing Ticket Completors (9) - 63 $KWENTA
With a supply of 313373, the above allocation amounts to about 1.32% of the initial supply, and will come from the 15% allocated to CCs. All Kwenta tokens are subject to a 1 year vesting period.
Kwenta should divert 50% of the current LM allocation (391.71625 KWENTA) towards bribing a Velodrome vAMM KWENTA/ETH pool. Velodrome also currently matches bribes using their OP allocation which has recently been renewed. LPs would receive an amount of VELO which is boosted by the voters, and voters of the pool would receive liquid KWENTA & OP. After the 1 month period performance of the different platforms should be compared and liquidity mining rewards adjusted accordingly.
The trial ran for one month, starting December 12, 2022.
Continue the existing Arrakis LP program, but lower the rewards from 783.43 liquid KWENTA to 195.8575 liquid KWENTA for the second month. Direct the other 391.71625 liquid KWENTA to the Velodrome trial as per KIP-46. Undertake a review at the end of this trial month to compare the results of both platforms.
The extension ran for one month, starting December 15th, 2022.
The first test was a trial of Velodrome's liquidity mining program. The results of the first test can be found here. Velodrome attracted roughly ~50% more TVL per 1 $KWENTA of incentives than Uniswap. This test will decrease the total incentives allocated to liquidity mining from 587.57375 KWENTA to 400 KWENTA split 50/50 instead of 66/33.
- Allocate 50 KWENTA per week to the Velodrome pool for one month.
- Allocate 50 KWENTA per week to the Uniswap pool for one month.
The second trial ran for one month, starting January 15, 2023.
Copyright and related rights waived via CC0.