ViteX Gateway Incentive Plan

Joel Yang

Published in

Vite Labs

4 min readMar 15, 2022

Updated Mar 15, 2022

Summary

To make the operation of ViteX more decentralized, we want to incentivize more Vuilders to create and maintain gateways. As such, we have designed this incentive mechanism to increase traffic and make ViteX a more robust trading platform for the entire crypto community.

Eligibility

On ViteX, any person or project can, in a permissionless manner, run a gateway to bring cross-chain tokens onto the Vite chain. To qualify for this Incentive Plan, a gateway needs to meet the following requirements:

The gateway has updated their gateway information per the Gateway Information Update Policy.
Either the gateway has partnered with an operator who has updated their operator information per the Operator Information Update Policy, or the gateway itself is an operator that has updated their operator information per the Operator Information Update Policy.

What Makes a Good Gateway Operator

Frequency of listing coins and integration with new chains
Swiftness in fulfilling deposits and withdraws
Timeliness in response to customer requests

Gateway Incentive Mechanism

SBP Sponsorship & Voting Rewards for Listing Trading Pairs on ViteX

The qualified gateway will have a brand new SBP sponsored by Vite Labs, with zero votes to begin with. The ecosystem fund will vote for the SBP for every milestone attained. The following are the general rules for the types of milestones and the corresponding rewards.

All incentives are provided at the discretion of Vite Labs. The gateways are always advised to verify with Vite Labs on the voting rewards before integrating with new chains or introducing new cross-chain tokens.

Slashing of Voting Rewards

Disclosure Requirements

The participating gateways will be required to publicize the following information:

Projected frequency of integration with new chains / new coins
The next two new chains and the next two new coins to integrate

The required information can understandably change throughout the operations of the gateway.

Liquidity Tests

The purpose of the gateway incentive plan is to bring cross-chain tokens onto ViteX for trading. Therefore, the order book depth and trading volume for the listed trading pairs are a crucial part of the success of a vibrant ViteX ecosystem. As such, we have created additional liquidity requirements.

The liquidity tests include two categories: Depth and Daily Trading Volume

Depth refers to the order book depth of the trading pair; Daily Trading Volume is the aggregate of the total executed trading amount of the trading pair. When a new token pair gets listed, the liquidity tests are being applied daily. Vite Labs will spot check the liquidity status and keep such records for decisions on liquidity bonus and illiquidity penalty.

Liquidity Bonus

If the new trading pair meets the following liquidity threshold, Vite Labs will provide additional rewards to the Gateway. The two categories are judged and rewarded separately. The maximum liquidity bonus for one token is capped at 600K VITE votes.

Illiquidity Penalty

Two weeks after the initial token pair(s) listing, if neither threshold for the Depth or Daily Trading Volume is met for any single pair of the newly listed token, starting in the third week, Vite Labs will scale back the SBP voting on a bi-weekly basis.

Given the reduction schedule, it gives the gateway a runway of at least 10 weeks to address the liquidity issue (20% reduction per 2 weeks equals to 10 weeks). And once the liquidity issue has been addressed by meeting either of the two Illiquidity Penalty Thresholds daily for 2 weeks, the full original amount of SBP voting for integration will be restored. The restored voting amount does not include the Liquidity Bonus if it has been applied previously.