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Building Upon dYdX's Incentive Programs
Article by Thomas Cintra (@tncintra) | Paper by Max Holloway (@max_holloway) and Thomas Cintra dYdX is transitioning to a dApp chain built on top of the Cosmos ecosystem with its long-awaited V4. dYdX V4 presents a great opportunity to make improvements on the protocol’s existing mechanisms. In our latest paper, we propose a few key changes to dYdX’s incentive programs that we believe will improve security and support the continued growth of the dYdX ecosystem. tl;dr: We review dYdX’s three m...
Building Upon dYdX's Incentive Programs
Article by Thomas Cintra (@tncintra) | Paper by Max Holloway (@max_holloway) and Thomas Cintra dYdX is transitioning to a dApp chain built on top of the Cosmos ecosystem with its long-awaited V4. dYdX V4 presents a great opportunity to make improvements on the protocol’s existing mechanisms. In our latest paper, we propose a few key changes to dYdX’s incentive programs that we believe will improve security and support the continued growth of the dYdX ecosystem. tl;dr: We review dYdX’s three m...
The Value of Nontoxic Orderflow to the Uniswap Protocol
Article and Paper by Max Holloway (@max_holloway) tl;dr Nontoxic orderflow creates immense value for LPs of the Uniswap Protocol, both from nontoxic orders’ fees and from the fees paid by sandwich orders surrounding many of these nontoxic orders. Still, we recommend that the protocol should not incentivize nontoxic orderflow until the protocol generates revenue. The Uniswap Foundation has earmarked 35% of their grants budget to incentivize protocol growth. One possible mechanism for incentivi...
The Value of Nontoxic Orderflow to the Uniswap Protocol
Article and Paper by Max Holloway (@max_holloway) tl;dr Nontoxic orderflow creates immense value for LPs of the Uniswap Protocol, both from nontoxic orders’ fees and from the fees paid by sandwich orders surrounding many of these nontoxic orders. Still, we recommend that the protocol should not incentivize nontoxic orderflow until the protocol generates revenue. The Uniswap Foundation has earmarked 35% of their grants budget to incentivize protocol growth. One possible mechanism for incentivi...
A 2nd Price CoW Protocol Solver Competition
Article and Paper by Max Holloway (@max_holloway)IntroductionThe CoW protocol aims to give users the value of their orderflow by conducting a competition for matching and settling the users’ order. Multiple orders are grouped together at discrete intervals, then those orders are sent to specialized agents called solvers. Solvers compete with one another to provide users with the best matching — as measured by a trader surplus quantity that serves as a proxy for traders’ utility. The matching ...
A 2nd Price CoW Protocol Solver Competition
Article and Paper by Max Holloway (@max_holloway)IntroductionThe CoW protocol aims to give users the value of their orderflow by conducting a competition for matching and settling the users’ order. Multiple orders are grouped together at discrete intervals, then those orders are sent to specialized agents called solvers. Solvers compete with one another to provide users with the best matching — as measured by a trader surplus quantity that serves as a proxy for traders’ utility. The matching ...
dYdX Safety Staking Module Review
Article by Max Holloway (@max_holloway) | Paper by Thomas Cintra (@tncintra) & Max Holloway A key component to user adoption of financial products is that they trust their assets will remain safe. Whether they're trusting a bank due to its FDIC insurance, or they're trusting a decentralized lending platform because of its open-source code, the product must inspire confidence in its users that their assets are safe. In the case of dYdX, users can gain this confidence by auditing dYdX...
dYdX Safety Staking Module Review
Article by Max Holloway (@max_holloway) | Paper by Thomas Cintra (@tncintra) & Max Holloway A key component to user adoption of financial products is that they trust their assets will remain safe. Whether they're trusting a bank due to its FDIC insurance, or they're trusting a decentralized lending platform because of its open-source code, the product must inspire confidence in its users that their assets are safe. In the case of dYdX, users can gain this confidence by auditing dYdX...
dYdX Trading Rewards Mechanism Review
Article by Max Holloway (@max_holloway) | Paper by Thomas Cintra & Max Holloway Since the introduction of the dYdX foundation in August of 2021, there has been an explosion of growth for the dYdX protocol. The protocol went from daily volume in the tens of millions of dollars to daily volume in the hundreds of millions of dollars, to now daily volume in the billions of dollars. Open interest has told a similar story of growth, with daily average open interest currently hovering around $1B. Cl...
dYdX Trading Rewards Mechanism Review
Article by Max Holloway (@max_holloway) | Paper by Thomas Cintra & Max Holloway Since the introduction of the dYdX foundation in August of 2021, there has been an explosion of growth for the dYdX protocol. The protocol went from daily volume in the tens of millions of dollars to daily volume in the hundreds of millions of dollars, to now daily volume in the billions of dollars. Open interest has told a similar story of growth, with daily average open interest currently hovering around $1B. Cl...
