dYdX’s Market Maker Rebate Plan: An Innovative Way to Boost Liquidity and Cut Reliance on Rewards
It is reported that dYdX initiated a community vote on whether to introduce a market maker rebate plan, aiming at stimulating liquidity and reducing dependence…
It is reported that dYdX initiated a community vote on whether to introduce a market maker rebate plan, aiming at stimulating liquidity and reducing dependence on rewards. The proposed market maker rebate plan is composed of five levels, which are divided based on the percentage of its trading volume in the 30-day trading volume on dYdX, and the fee rebate is between 0.0025% and 0.01%. The voting will end at 09:34 Beijing time on February 22.
DYdX initiates a community vote on whether to introduce the market maker rebate plan
Interpretation of the news:
Decentralized finance (DeFi) offers a promising ecosystem that promotes financial inclusion and smart contract-based transactions. However, its quick rise has also resulted in a highly competitive landscape that offers a wide range of products, services, and platforms. To stay ahead in this highly segmented market, dYdX has initiated a significant overhaul to introduce a market maker rebate plan that aims to stimulate liquidity and reduce reliance on rewards.
According to a report, dYdX has launched a community vote to introduce its market maker rebate plan, which comprises five levels that are based on the trading volume on the platform. The proposed fee rebate is between 0.0025% and 0.01%, depending on the volume traded by a particular market maker. This rebate structure provides an incentive for market makers to inject liquidity into the market, thus reducing slippage and increasing the probability of settling trades on the platform.
The proposed market maker rebate plan is an innovative way to enhance liquidity in the dYdX platform while reducing the dependency on rewards. Currently, dYdX offers rewards to users who provide liquidity in some of its pools, which can be a costly measure that can harm the protocol’s sustainability in the long run. On the other hand, the proposed market maker rebate plan is a more sustainable approach that provides incentives for market makers to provide liquidity while potentially reducing the platform’s need for rewards.
In conclusion, the proposed market maker rebate plan by dYdX is a significant step towards boosting liquidity and achieving sustainability in the highly competitive DeFi market. If approved, this innovative approach will attract more market makers, improve market depth, and ultimately provide a better trading experience for all users on the platform.
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