Announcing The “Tradooor Rebate Program”
The Tradooor Council has gathered at the base to make dexter the go-to DEX for LST trading. They decide to set up the “Dexter Tradooor Fund(DTF)”. The Tradoor Fund will be used to attract traders to Dexter by rebating the swap fees and providing additional incentives. Read more to find out how this will lead to growth for Dexter.
The DEX playground
Traders and liquidity providers collaborate in a DEX to create a robust and efficient marketplace. Liquidity providers lock in funds in liquidity pools to facilitate trading to earn fees from trading activity by traders. They also take on the risk of impermanent loss and opportunity loss if bonding periods on the liquidity provided exist. A DEX tries to create a healthy ecosystem for both these players by ensuring deep liquidity for traders for better execution of trades and a high trading volume for LPs to generate yield through fees. A standard method to incentivize deep liquidity is to provide incentives to LPs in addition to the trading fees generated.
Dexter believes that this method could be unsustainable and has devised a new strategy to attract growth 👇
Instead of incentivizing just LPs, why not incentivize the traders to use the platform and generate “real yield” for LPs?
The “Tradooor Fund” Rebate Program
The Tradooor Rebate program is designed to benefit traders who actively participate in the stkATOM/ATOM liquidity pool. Traders can now avail themselves of a significant advantage by receiving a refund on their trading fees. For each trade executed on the pool, traders will be refunded the standard swap fees of 0.3% and an extra incentive of 0.05%. These rewards will be distributed in the form of $XPRT tokens, which are airdropped directly to the same wallet used for trading activity on a daily epoch basis at 9 AM UTC. The rebate program will run until a cap of 34,500 $XPRT tokens is reached.
Check it out here — https://app.dexter.zone/rebate-program
Flywheel Effect: Benefits for All Participants
The rebate program operates on the principle of a flywheel effect, benefiting all participants involved in the DEX ecosystem. By incentivizing traders to actively participate in trading, the program generates increased trading volumes and, subsequently, more fees for liquidity providers. This heightened trading activity attracts more liquidity, creating a more efficient market for traders and, thus, leading to a virtuous growth cycle.
Liquidity providers play a crucial role in this ecosystem. Unlike traditional DEXs that primarily incentivize providers for bonding liquidity, this rebate program introduces “Real Yield” for liquidity providers. As traders engage in more trades and generate increased volumes, liquidity providers earn more fees, ensuring a fair and sustainable yield.
The efficient market created by the rebate program benefits all traders on the DEX. With increased liquidity and trading volumes, traders can enjoy improved price execution and reduced slippage, enhancing their overall trading experience.
Conclusion
The rebate program is a novel strategy to align incentives for liquidity providers and traders and create a win-win arrangement. The program’s flywheel effect fosters an efficient market with real yield opportunities. As this rebate program gains traction, we can expect it to attract higher trading volume and deeper liquidity, further propelling the growth.
