Swarm Markets weekly rewards distributions for liquidity providers and traders
Swarm Markets pays SMT rewards every week to users who bring value to the world’s first licensed DeFi platform.
Note: the rewards policy posted on the Swarm Markets GitHub repository is the only authoritative source for information on platform rewards. Both policy and distribution records are accessible there. Any future changes to the rewards policy will be announced in advance and updated on GitHub here: https://github.com/SwarmMarkets/smt-rewards-distribution
Liquidity providers and traders get rewards every week just for using the platform. There are even special reward boosts for users who hold SMT or who add liquidity into our SMT liquidity pools. Below is all the information on how SMT rewards are calculated and distributed.
Liquidity provider rewards
Liquidity provider (LP) rewards make up the largest tranche of weekly SMT rewards with a total of 75% of rewards going to LPs. LP rewards are calculated based on the 7-day average (mean) of added liquidity as a percentage of the weekly average (mean) of total liquidity.
A Loyalty Boost is then added for users who hold a high ratio of SMT to assets added to liquidity pools. Adding liquidity to SMT pools earns LPs a 4x bonus compared to other asset pools.
LP rewards key facts:
- LP rewards pool: 75% of total weekly rewards
- User’s SPT value prorated according to proportion of total liquidity on platform
- $0 — $10 million liquidity added to platform: APY capped at 500%
- $10 — $100 million liquidity added to platform: APY capped at 250%
- $100+ million liquidity added to platform: no APY cap
- Up to 100% additional Loyalty boost for SMT holders
- 4x bonus for adding liquidity to SMT pools
Trader rewards
Rewards for traders are calculated after the LP rewards pool so that the trading rewards total is 1/3 of the LP rewards pool total. Individual trading rewards are based on the percentage of the total aggregate value of trades for the previous week in USD after which the loyalty boost is applied.
Trading rewards key facts:
- 25% of total weekly rewards
- Individual trading value prorated by total value of transactions
- Loyalty boost
Transact for free with gas reimbursements
All gas fees for swaps and adding liquidity are paid back in SMT at the beginning of each following week. Swarm Markets calculates the 7-day average USD value of SMT and reimburses customers in for the gwei (in USD) paid at the time of each transaction.
How to earn SMT loyalty boost rewards
Loyalty Rewards are paid out weekly based on the ratio of SMT value held to the value added in liquidity pools.
To calculate the amount of SMT held, Swarm Markets adds the amount held in a user’s trading wallet, proxy wallet, SMT added to liquidity pools, and any unclaimed SMT rewards.
- SMT held in: trading wallet, proxy wallet, liquidity pools, and any unclaimed SMT rewards
- Ratio of SMT held vs total asset value added to liquidity pools determines loyalty rewards:
- Bronze: 1–5% of liquidity value held in SMT: +25% boost
- Silver: 5–10% of liquidity value held in SMT: +50% boost
- Gold: lesser of 10%+ of liquidity value or $1M held in SMT: +100% boost
- Boost factor applied to LP rewards and trading rewards.
When and how SMT rewards are paid
Weekly distributions of SMT are based on the predefined weekly SMT rewards release schedule. The SMT rewards will be calculated and made claimable via the Swarm Markets platform after one week. The exchange rate for all SMT rewards is based on the 7-day average (mean) price for SMT in US dollars.
If the total amount of rewards is less than the Swarm Markets’ budget for the week, then the remaining SMT rolls over into the rewards pool for the following week. If the total amount is greater than the budget for the week, then the APY is reduced in order to normalize the rewards for everyone equally.
Swarm Markets has already distributed the first weeks’ rewards. At the moment, it’s still possible to earn additional rewards by joining the Launch Liquidity Program. Even more rewards will be distributed from the community rewards pool to help grow the platform and encourage more users to bring more assets to our ecosystem.
