Futureswap v4 Incentives
With Futureswap v4 around the corner, it is time to start sharing what to expect when it launches. This post quickly dives into the overall design of the incentives in v4.
Earning FST
Unsurprisingly to most of you, users of the platform will be able to earn FST in proportion to their activity. There are 2 ways to do so:
- Being a liquidity provider
- Trading perpetuals
Futureswap v4 will launch with a single ETH/USDC pool, but the governance will likely vote in many more exchanges. The goal is to have pool and exchange creation eventually become completely ungated, as we see Futureswap v4 as being like Uniswap but with leverage.
We know that the community will certainly wonder about the exact FST incentives issuance details, those are still being finalized. A future post on that subject will be published soon, so keep an eye out.
Liquidity Providers (LP)
LP incentives have been designed to be as hassle-free as possible. Your rewards are calculated based on your share of the pool and on the amount of time you spent providing liquidity. Similarly to most AMMs, users have to provide equal amounts of each side of the pool to engage in LPing. However, there is no impermanent loss! We’ll have a full post coming out about how this is accomplished. The first pool will start with ETH & USDC before expanding to more tokens as new pools are created.
Traders
Incentives for trading on v4 are a little different. Our goal is to incentivize organic volumes and disincentivize wash trading. It means that you won’t receive FST for just opening and closing trades, but really you’ll be rewarded based on 3 variables:
- Leverage
- Time
- Collateral
For example, say you open a 5x leverage on 10 USDC of collateral trade and have it open for 3 hours. That equates to an incentive reward of: 150 (5 x 3 x 10). If other traders had a combined reward of 300 for the same time period, you would earn 150 / 450 = ⅓ of the FST trading incentives for that time period.
An improvement from v2 is that there are no epochs for incentives, and all incentives are earned continuously. You no longer have to worry about just missing an epoch.
Incentives Vesting
All earned FST by traders and liquidity providers have a vesting period chosen by the user. The options are anything between 0 days and 1 year. FST vests based on a quadratic curve, meaning that the most economical decision is likely to lock up for the full 1 year, thus reducing the FST supply.
Tokens that have been earned by trading or LPing do not instantly start vesting, users need to select the vesting period. This will start the vesting for all tokens earned up until then.
Selecting a shorter vesting period will reduce the amount of FST received. A vesting period closer to zero makes the user give up on most of the claimable FST. Any vesting period between 0 and 52 weeks will grant the user a portion of the FST proportional to X^2, where X is requested vesting period / full vesting period, and is between 0 and 1. Thus, a vesting period of 26 weeks — half of the full vesting period, will only allow one to obtain 25% of the accumulated FST. The FST tokens are vested and claimable when the vesting period ends.
In the scenario that users select a vesting period inferior to the longest option of 1 full year, any tokens that they forfeit are sent to the DAO’s treasury for token holders to decide on uses later.
More content about the exciting plans we have for our upcoming launch will be released over the next few weeks. We appreciate any feedback you might have on these v4 incentives, come share your thoughts in our Discord channel.
Thank you to Erebos for the contributions in writing this! We are always looking for talented writers, so if that sounds like you, please reach out in Discord. To bootstrap content, FST will be given to selected writers!
LEGGO!
