[Rage Trade] LTIPP Application - FINAL

DAO Programs & Initiatives Long Term Incentives Pilot Program
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Requested Grant Size: 425,000 ARB

Justification for the size of the grant:

We are requesting a 425,000 ARB grant to support our pursuit of the following objectives:

  • Generate > $500m in organic volume
  • Onboard ~5,000 users to Rage arbitrum markets via our trader competitions
  • Integrate two more arbitrum perpetual markets

Trader Competitions - Rage to Riches
We will primarily achieve this objective by incentivizing daily and weekly trader competitions.

We have been running with daily and weekly competitions. So far, we have completed 20 rounds of daily competitions and seven rounds of weekly competitions.

Historical Rage to Riches (GMX V2) Cost Breakdown

Period Number of rounds Total
Daily Rounds 07/03/2024 to 26/03/2024 20 rounds $20,000
Weekly Rounds 28/02/2024 to 16/04/2024 7 rounds (49 days) $85,910

We have now expended $105,910 (62.85k ARB @ $1.6 average cost per ARB).

Below is a breakdown of our achievements with the above expenditure:

  1. 1,103 New traders
  2. $104 million in total volume.
  3. $95,000 average trading volume per user.
  4. $96 Average Customer Acquisition Costs

425,000 $ARB will enable us onboard:

  • (425,000 * 1.1)/96 = 4,870 Users

N.B - 1.1 denotes the current price of ARB

With that said, if we are granted 425,000 ARB, we’d host multiple weekly and daily trading competitions as follows:

Breakdown Total
Daily Trader Competition 2,779 * 90 days 250k ARB
Weekly Trader Competition 14,584 * 12 weeks 175k ARB

We are already running trading competitions on a small scale with remarkable levels of success.

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On the competition’s launch day, we achieved record-high daily trading volumes of $8m. Days later, we set new records with total daily volumes reaching $10.3 million, $11.6 million, and $12.6 million, respectively.

Using a fraction of the 100k ARB grant we received from GMX, we have generated more than $240m in volume since we started distributing incentives to GMX v2 users.

Source: Dune Analytics

Execution Strategy:
The incentives will primarily be sent to the wallets of winners of the trading competitions.

Only traders trading via our Arbitrum markets will be incentivized. In our trading competition, the playing field is more level as we will use ROI to measure trader success during the competition, similar to the technique used by GMX Blueberry Club. This ultimately increases inclusion since retail and smaller players can participate in these competitions.

Addressing Wash Trading

We have been very proactive in mitigating wash-trading on our aggregator. The design of our ROI-based competitions makes it extremely difficult for traders to game the system in order to win the rewards.

To mitigate potential abuse and ensure the integrity of our incentive system, we have implemented robust anti-abuse measures. These include sophisticated mechanisms to detect and deter wash trading or Sybil-attack-related incidents. Addresses who engage in such activities will be promptly excluded from receiving incentives.

Furthermore, our ROI-based trading competitions add a layer of protection against abuse. Since these competitions are based on actual trading performance and return on investment (ROI), individuals must demonstrate genuine trading skills to earn rewards. This further discourages any attempts to manipulate the system for unfair advantage.

Below are some specific wash-trading preventive measures we have implemented:

  • Minimum Trade Size
  • The ROI of all users is calculated based on the average collateral. This allows for fair ranking between small and larger users.

    Source: Rage Competition Page

Prize distribution
The current Rage to Riches weekly round has 25 prize winners and one lottery winner. The prize distribution is as follows:

  • 1st Place: 2,500 ARB
  • 2nd Place: 1,500 ARB
  • 3rd Place: 1,000 ARB
  • 4-10 Places: 350 ARB
  • 11-20 Places: 100 ARB
  • 21-25 Places: 50 ARB
  • Lottery: 1,000 ARB (this is aimed at incentivising trading volume regardless of the trader’s ROI)

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Our daily rounds had one winner walking away with 500 $ARB per round.

Daily/Weekly Competition Breakdown

Breakdown Total
Daily Trader Competition 2,779 * 90 days 250k ARB
Weekly Trader Competition 14,584 * 12 weeks 175k ARB

Implementation Cycle:
We will follow three simple processes to implement the proposal:

  • Initiate trading competition. Set up Dune dashboards or subgraphs for metric tracking and announce the initiative. Currently, stats are already published directly on:

  • Regular Updates and Reporting: Monitor and adjust based on platform performance, trader engagement, and community feedback. More specifically, we’d publish reports on:

    • User Growth
    • Customer Retention
    • Fees Paid
    • Volume Generated
    • Wash trading mechanisms we use

  • Review and Analysis: Conduct a thorough post-implementation review to identify improvements and insights for the Arbitrum ecosystem’s growth.

As the competition unfolds, we may also consider gamification elements such as badges, NFTs, achievements, or special rewards for milestones achieved. Gamification can increase motivation, competitiveness, and retention among participants.