13-Week Arbitrum x Buffer Incentive Program - Trade or LP to Ear…

13-Week Arbitrum x Buffer Incentive Program - Trade or LP to Earn

June 6th, 2024

This living document outlines and tracks how the ARB incentives from the Buffer LTIPP Proposal to the Arbitrum DAO have been utilized and distributed over time.

Thanks to Arbitrum’s Long-Term Incentives Pilot Program (LTIPP) a total of 56,624 $ARB tokens will be rewarded to Buffer traders and used to boost liquidity incentives for LPs over the next 13 weeks!

Program Summary

The LTIPP program aims to boost liquidity and attract new users to Arbitrum. To apply for incentives, based Arbitrum builders and projects submit proposals to receive a defined number of $ARB tokens.
Distribution is democratized and recipients are decided by the community and delegates ($ARB holders) via a voting process.
Buffer Finance’s proposal for 56,624 $ARB was approved under the LTIPP framework.
Key focus areas of Buffer LTIPP incentives are: targeted incentivising of liquidity provision, and fostering a vibrant on-chain trading environment.
From the total allocation, 26,900 $ARB are directed towards liquidity incentives via LP yield boosts.
The remaining 29,724 tokens are dedicated to incentivizing organic trading activity via the first ever league based trading competition on Buffer and jackpots - for daily fun & profit.
❗️Update: Jackpots have been closed, and 10,00K ARB allocated as jackpot incentives have been rolled over to LP Boost Incentives. (Live incentives currently: LP Yield Boosts, League Based Trading Competition)

Timeline Summary

The timelines, amount of ARB and conditions for distribution for each epoch under this program can be amended from time-to-time. Make sure to follow Buffer on Twitter to receive regular updates or check this section.

This grant is meant to be completely distributed to Buffer Protocol users until September 2024 over a period of 13 epochs.

LP Yield Boost

Total Allocation - 26,900 $ARB
Start - June 12th, 2024
End - September 2nd, 2024

Deposits are live:

League Based Trading Competition

Total Allocation - 19,724 $ARB
Start - June 12th, 2024
End - September 2nd, 2024

Jackpots

Total Allocation - 10,000 $ARB
Start - June 12, 2024
End - September 2nd, 2024

The timeline table will be updated as the incentive buckets roll out.

Rewards System

Yield Boost Incentives

Buffer is launching an LP-to-earn program with yield boosts to grow liquidity provider collateral which will be crucial for expanding Buffer prediction markets on Arbitrum.

The LP-to-earn program gives users a chance to max EV farm REAL YIELD on BLP-USDC deposits on top of 70% trading fee generated on the platform.

**(**❗️Update: Jackpots have been closed, and 10,00K ARB allocated as jackpot incentives have been rolled over to LP Boost Incentives. )

How does it work?

The BLP vault market makes liquidity for Buffer prediction markets - Up/Down and Above/Below. In exchange the vault earns 70% of the trading fees for underwriting up/down options trading on Buffer.

The boost vault acts as an additional yield, supplementing LP’s earnings, inclusive of trading fees and smoothens PnL. LPs can lock their tokens for a maximum duration of 90 days to receive max boost multiplier.

How can I participate?

The yield boost process can be simplified into 2 steps:

Step 1 - Go to the LP page (linked below) and deposit a desired amount of USDC in the BLP Vault. By completing step 1. You will start receiving 70% of the trading fee generated on Buffer.

Step 2 - The final destination is the LP boost vault. By locking your LP position in the vault, you can receive $ARB boost incentives on top of trading fees.

Boosts will be calculated linearly proportional to the chosen duration of the lock and the maximum lock multiplier.

Min lock period - 7 days
Max lock period - 90 days

Allocation of the LP boost incentives are based on weekly epochs. Every epoch, a set number of ARB will be allocated for boosts.

A time-weighted average of users’ BLP balance is taken for the whole week to calculate proportional rewards. Accrued incentives can be claimed anytime.

Trading Leagues

A new trading arena is open, bigger and better, for those who have the mettle to withstand its heat.

Trading leagues is an exciting take on competitive events on Buffer, that rewards consistency and performance.

Traders compete with each other on a weekly basis with an opportunity to get promoted or demoted depending on your weekly performance.

What is the league structure?

In total, there are 5 leagues - Bronze, Silver, Gold, Platinum and Diamond. When season 1 begins, traders will be automatically classified under the Bronze league. From here, you have the opportunity to work your way up each league. As the seasons roll out, traders will be sorted into their respective leagues according to their respective trading volume from the previous week.

Can I enter the Bronze league in the middle of a season?

No, you can only enter the Bronze league at the start of the each season.

What is the eligibility criteria for each league?

How are traders ranked and rewarded?

Each league holds, 30 traders with the highest absolute PnL and 10 traders with the lowest absolute PnL. Depending on their ranking, traders are awarded points. Based on the total accumulated points with each day’s weight, a weekly rank is derived.

Points for rank (n) are calculated using the following geometric sequence, with the goal to ensure each position earns more than the place below it, rather grouping the leaderboard standing in equal reward buckets.

Formula for highest absolute PnL leaderboard

= 20 * 1.157043^(30-n)

Formula for lowest absolute PnL leaderboard:

= 100 * 1.146926^(10-n)

Finally, $ARB rewards are distributed at the end of each season based on the weight of the accumulated points.

Leaderboard:

What is the Daily League?

Each day, the Daily League will rank all traders based off their absolute PnL. The Daily League is unaffiliated with the rest of the leagues, as it relates to promotions or demotions.

How do I claim my prize?

Trading League $ARB rewards can be claimed from the “Reward Page“ as a season concludes.

How do promotions and demotions works?

If the trader has minimum volume requirements of the next league, they are promoted by one tier. If a trader does not have the pre-requisite volume they will drop to the league they are eligible to be in. For example, a Gold league trader may drop to bronze league if they do not have the perquisite volume for Gold.

Jackpots

**(**❗️Update: Jackpots have been closed, and jackpot incentives have been rolled over to LP Boost Incentives. )

The Jackpot system is a low-cost, high-reward activity that leverages a random reinforcement reward mechanism to foster engagement of traders, completing the incentive growth flywheel.

How does it work?

Trading leagues too competitive for you? You can still win $ARB incentives with the newly introduced jackpots!

Every notional trade size value reaching 75 ARB or 20 USDC or USDC.e gives traders an opportunity to win big from a total prize pool of 10,000 $ARB.

New update ✨- Notional Trade Size: 75 USDC/ARB- Higher Probability of winning: 1%- Higher Max Win: 75 USDC/ARB

As soon as the trade is placed, a random number is received from the vrf (if the user qualifies for a jackpot), based on the vrf value a fixed payout is made to the trader.

The unique qualification criteria that consider notional trade size, instead of individual means that even smaller trades can quickly stack up to qualify you for the jackpot, making easier for everyone to participate and win!

Jackpot page: