Today, Hegic celebrates its 🎊 3rd birthday 🎊 with the launch of a new $1,000,000 reward pool. It is live on Hegic and rewards in Ether (ETH) will be accruing for all future exercised options with positive P&L.
TL;DR
- Total reward pool size: $1,000,000 in Ether (ETH)
- Accruing for all trades with positive P&L on Hegic
- Losing trades are not considered in the reward calculation
- The reward is active during February 20, 2023 — December 20, 2023
- The reward multiplier is based on the total cumulative positive P&L made by all options traders during the period of the pool’s active phase
- 0.2x P&L multiplier in the $0 — $1M total cumulative P&L range;
0.3x P&L multiplier in the $1M — $2M total cumulative P&L range;
0.5x P&L multiplier in the $2M— $3M total cumulative P&L range - The reward pool will be distributed once the final $3M total cumulative positive P&L milestone is reached or on December 20, 2023
- A $1,000+ individual P&L requirement (made on any amount of trades) has to be met in order to be eligible for the reward
- If the $1,000+ P&L requirement isn’t met by some traders, their rewards will be distributed among those who will meet the requirement
- The more traders coordinate and cooperate with each other, the higher the multipliers and final unlocked rewards can be for everyone
1/8: Reward Pool: $1,000,000 in ETH
$1,000,000 in ETH (600 ETH) has been allocated for the reward pool by Hegic Development Fund (HDF). You can check the reward pool’s address on-chain balance here: https://arbiscan.io/address/0x9C0aAcB8Ea4DE09F6AB66c21Dca0C7d710646547
The rewards are denominated in ETH with calculations based on the fixed price of ETH, which was approximately ~$1700 at the moment of launching the pool.
If the price of ETH rises during the active phase of the reward pool, the USD value of rewards to be distributed would be higher as well.
For example, if at the moment of the rewards distribution the price of ETH is 3x higher in comparison to the initial price, then the USD value of rewards to be distributed among the eligible participants will be 3x higher as well, i.e., $3,000,000.
1/8: Reward pool in ETH with potential USD value upside
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2/8: Reward Multipliers
Every options trade on Hegic with positive P&L will now have a reward multiplier. The multipliers are 0.2x, 0.3x, and 0.5x, based on three milestones that will be described below.
For example, if you exercise a call option with $1,000 in net positive P&L, and if the current multiplier is 0.2x, then you will unlock $200 in ETH rewards from the ETH pool and redirect it to the unlocked rewards pool that will be distributed at the end of the reward pool’s active phase.
2/10: Every trade with positive P&L unlocks a share of rewards in ETH
✔️✔️🔘🔘🔘🔘🔘🔘
3/8: Milestones, Multipliers and Reward Weights
- Milestone 1: $1M in total cumulative positive P&L for all trades
- Milestone 2: $2M in total cumulative positive P&L for all trades
- Milestone 3: $3M in total cumulative positive P&L for all trades
- 0.2x ($0.2 per $1 in P&L) in the $0–$1M total cum. P&L range
- 0.3x ($0.3 per $1 in P&L) in the $1M — $2M total cum. P&L range
- 0.5x ($0.5 per $1 in P&L) in the $2M — $3M total cum. P&L range
- $200,000 in ETH will accrue in $0–$1M total cumulative P&L range
- $300,000 in ETH will accrue in $1M — $2M total cumulative P&L range
- $500,000 in ETH will accrue in $2M — $3M total cumulative P&L range
The active reward multipliers are based on the total P&L paid to options holders for all exercised contracts. It starts at 0 and grows once the trades with positive P&L are exercised on Hegic.
The total cumulative P&L milestones are not individual for each trader, but rather one for all traders who exercise their options on Hegic with positive P&L.
Only trades with positive P&L are considered and calculated. Trades with negative P&L (expired or not exercised) do not affect the total cumulative P&L milestones, so it can only grow with time without declining.
3/8: The current reward multiplier is based on the total cumulative P&L
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4/8: Reward Pool Distribution Triggers
The rewards accrue after every trade with positive P&L in the form of unlocking a share of the total reward pool. However, the rewards distribution is not continuous.
The reward pool distribution will happen once the final $3M total cumulative positive P&L milestone is reached. Otherwise, all the unlocked rewards from the pool will be distributed on December 20, 2023.
4/8: Reward pool distribution: $3M milestone reached or on Dec 20, 2023
✔️✔️✔️✔️🔘🔘🔘🔘
5/8: Individual P&L Requirement
To be eligible to receive a share of the reward when it is distributed, one must meet the $1,000+ positive P&L requirement.
During the active phase of the reward pool (February 20, 2023, to December 20, 2023) or before the final milestone of $3M is reached, you should make at least $1,000 in positive P&L on any amount of trades on Hegic.
Only trades with positive P&L are considered and calculated. Trades with negative P&L (expired or not exercised) don’t affect the total cumulative P&L milestones, so it can only grow with time without declining.
Traders who don’t meet the $1,000+ positive P&L requirement during February 20, 2023, to December 20, 2023, or before the final milestone of $3M is reached will not be eligible to receive rewards. Thus, their rewards will be distributed among those who meet the requirement.
5/8: To be eligible for the reward, meet the $1,000 P&L requirement
✔️✔️✔️✔️✔️🔘🔘🔘
6/8: Individual Reward Calculation
As described above, the reward distribution is not a continuous real-time process. When a trade with positive P&L is made on Hegic, traders redirect a share of the reward to the unlocked rewards pool that will be distributed at the end of the reward pool’s active phase.
The individual reward calculation at the distribution is the following:
Individual Positive P&L / Total Cumulative Positive P&L * Total ETH Reward
For example, during the active phase of the reward pool you have made 50 trades with the total individual positive P&L of $50,000. The total cumulative positive P&L made by all eligible traders is $3,000,000, so the final milestone is reached. The total ETH reward is 600 ETH and it will be distributed in full. Then,
$50,000 / $3,000,000 * 600 = 10 ETH (~$17,000) is the reward.
6/8: The reward will depend on your P&L and the total cumulative P&L
✔️✔️✔️✔️✔️✔️🔘🔘
7/8: Coordination and Cooperation
As it was stated above, the reward weights are the following:
- $200,000 in ETH will accrue in $0–$1M total cumulative P&L range;
- $300,000 in ETH will accrue in $1M — $2M total cumulative P&L range;
- $500,000 in ETH will accrue in $2M — $3M total cumulative P&L range
With three milestones of $1M, $2M and $3M — not individual but in total cumulative positive P&L — a positive-sum strategy is moving deeper through the positive P&L ranges while doing that in cooperative manner.
The highest multipliers and rewards can be achieved by the collective coordination of all traders who find it reasonable to reach these milestones during the active phase of the reward pool.
The more traders will be actively trading options, and the higher their total cumulative positive P&L will be, the greater the share of the total reward can be unlocked and distributed among them.
7/8: Coordination and cooperation lead to higher rewards for all
✔️✔️✔️✔️✔️✔️✔️🔘
8/8: Trading Against the Reward Pool, Not Others
In conclusion, here is a small note for those who want to participate in the reward pool distribution: there is no reason to compete against each other, to game the system or try to outsmart others on this journey.
The total reward pool of $1,000,000 in ETH has already been allocated. Now it’s up to your personal desire to cooperate with other traders to get a share of this reward for your trading activities during the active phase of the pool.
You can reach the minimum requirement of $1,000+ in net positive P&L and wait for the rewards distribution.
You can also be proactive and inspire others to coordinate in reaching the higher total cumulative positive P&L milestones to have higher multipliers and rewards for all.
You are not trading against each other, but collectively participating in the conquest to unlock a higher share of the reward pool that will be shared among all of you if you are successful in your endeavors.
Trade together, unlock rewards together, have fun together!
8/8: No competition for rewards or any upside in outsmarting others
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Thanks to all early adopters for using Hegic during the last three years since it was launched on February 20, 2020. The best is yet to come.
Have a great journey,
Molly Wintermute
20/02/2023
