Regarding the long-term trading mining incentives of perps.

Assuming that Alpaca Finance uses 100,000 tokens repurchased each week to reward user trading volume, the following models can be designed to promote the growth of Perps’ trading volume and liquidity pool:

Increase the amount of trading volume rewards: Alpaca Finance can gradually increase the number of tokens rewarded each week to increase user participation in trading. The number of token rewards per week can be adjusted based on the growth of trading volume.

Design different levels of trading volume rewards: Alpaca Finance can set different levels of rewards based on user trading volume, such as dividing users into different trading volume levels and setting different rewards for each level.

Increase LP mining rewards: In addition to trading volume rewards, Alpaca Finance can further encourage users to provide liquidity and increase the size of the liquidity pool. LP mining rewards can be increased to attract users to provide liquidity and increase trading volume and the liquidity pool’s size.

Design other incentive mechanisms: In addition to trading volume and LP mining rewards, other incentive mechanisms can be designed, such as referral rewards, community governance rewards, etc., to attract more users to participate in and support the development of the Perps platform.

In summary, Alpaca Finance can promote the growth of Perps’ trading volume and liquidity pool by continuously increasing token rewards, setting different levels of rewards, increasing LP mining rewards, and designing other incentive mechanisms, thereby achieving a positive feedback loop of expanding the scale. At the same time, Alpaca Finance needs to reasonably evaluate the risks and benefits of incentive mechanisms and timely adjust and optimize the design to ensure the platform’s stable development.

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Thanks for your suggestions. We’ve implemented most of these things or are scheduled to:

Great idea! It’s definitely something worth experimenting with after or during the launch. As Sam mentioned, a referral program, liquidity rewards, and trade competitions are already planned.

However, it might still be worth setting aside some of the profits to experiment with additional trading reward programs. Liquidity is unlikely to be the limiting factor, so an extra trading reward program would likely be the most impactful in terms of generating more trading, more fees, and indirectly more LP rewards.

Implementing something similar to our competitor could be worth considering. For every $1 traded, a user would receive a “perpAlpaca” token that could be redeemed at the end of the week for a share of the trading incentives. More trading would mean more “perpAlpacas” and a higher share of the rewards.

We could fund this reward pool by taking a fixed percentage or quantity of the fees collected from the previous week. As you mentioned, it would be worth investigating how much trading is influenced by these rewards and whether there are positive feedback loops. For example, does increasing the rewards lead to more trading? What is the limit, and at what point do incentives start hurting revenue?

If this program is successful, it might even be worth considering reducing the allocation of the revenue to LP and instead allocate a fixed percentage to this pool.

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