The Ripe Juice Score

More on game theory and the economic incentives that drive behavior in Ripe

Because DeFi is permissionless, global, and decentralized, there are people from all over the world, of all different backgrounds, using these protocols. They don’t know each other. Everyone is represented as a long string of text and numbers (their Ethereum wallet address). There’s no concept of gender, nationality, skin color, educational background, job status, etc. DeFi is truly open and available to all. And that’s a beautiful thing.

How do decentralized protocols create the fertile ground in which this diverse group of people can cooperate and work together? How do protocols super-charge participation and activity on the right things?

Economic incentives. Game theory.

Most participants in DeFi are economically rational. Today we’re gonna talk about one of the core components of Ripe’s game theory and economic incentives: the Juice Score.

Loyalty Program

Your Juice Score is kind of like a Ripe loyalty score, and can range from 0 to 100. As we began to conceptualize the score, we wanted something that leveled the playing field for everybody—we don’t build products or systems where only “the rich get richer.” That’s not what DeFi is about. So the design of Juice Score is intended to give everyone the same opportunity to achieve a high score. Whether you are a small fish or a giant whale, your ability to get a Juice Score of 100 is the same.

Perks of Juice Score

The higher your Juice Score, the better your Ripe economics will be. You’ll have more favorable terms and ultimately a better experience. Here’s what a higher Juice Score could mean for you:

• Higher yield on deposits (larger share of boosted yield from The Endaoment)
• Better borrow terms (lower interest rate, higher loan-to-value ratios, lower liquidation fees, etc)
• Lower fees on jUSD redemptions
• Better bond terms (higher discount)
• Better “Dip Buying” discounts (when users go into liquidation, “Dip Buyers” have the opportunity to buy assets at a discount). More on this mechanism later.

How to Increase Juice Score

As you’d expect, we want to incentivize the most valuable behavior on Ripe — actions that create a healthy, balanced, strong protocol. So your Juice Score increases when you take actions that benefit the protocol overall.

Here are actions that help increase Juice Score:

• Bonding (purchasing jUSD at a discount with your other stablecoins)
• Staking (jUSD, RIPE, LP tokens)
• Borrowing jUSD
• Dip Buying (facilitate when users are liquidated)

If fintech products or other web3 protocols decide to integrate with Ripe, the DAO can vote to give them a Juice Score boost as well. All transactions coming from designated wallets or smart contracts would have a Juice Score floor.

Juice Score Equation

Here’s the actual equation for how the Juice Score is calculated for a given user. First let’s map the variables to definitions:

• Staked Deposits: The value of all “Juice Assets” staked by a user (jUSD, RIPE, and related LP tokens).
• Outstanding Debt: The value of a user’s outstanding debt on Ripe
• Bond Purchases: The number of bonds purchased by a given user. There is a slow decay on this. We want to encourage frequent, consistent bond participation.
• Dip Buying Value: The amount of “dip buying” the user has done (to facilitate liquidations). This also has a slow decay.
• Total Earn Deposits: The total value of all deposits in “Earn”

As you can see, with the denominator being a function of Total Earn Deposits, even small depositors can achieve a perfect Juice Score of 100. We do not want to build a system where only the whales can benefit, where only the rich get richer. This is not zero-sum. Everyone should have access to the best financial services, economic terms, and yield opportunities. That’s what DeFi is all about.

The Juice Score is meant to be a fun way to reward users who help the protocol thrive and grow. It has a tangible, real economic impact on one’s Ripe experience. It’s basically (3,3) but where actions are actually measured and judged. If you scratch Ripe’s back, it’ll scratch yours. How high can you go with your Juice Score?