[Omen] Idea: Incentive/Rebate Program for Users (30 day test)

dxDAO
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I have an idea.

I propose that DXdao should incentive trading on Omen, rather than Liquidity provision.

Something like: when you trade you will receive a reward/rebate of say 3% of the notional your trade (covering your trading fee plus gas, assuming you do a big enough trade).

I know that some people say that this can be gamed. I’d like to see people “game” it. If it brings a ton of volume and activity to Omen, then that could be a good game.

I propose that we pay out rewards/rebate in DXD.
We can start with a limited amount of DXD of 50 for this program (currently this is about $14k of DXD) or ~2% of our unlocked DXD.

One safety mechanism to put in place would be that we could implement a rule that the trading has to be done on one of the existing Markets as of today, Aug 18, 2020.

The tracking would work this way:
We look at all wallets trading on Omen starting today, and pay out on a First-Trade-First-Reward basis up to a maximum of 50 DXD at the end of a 30 days period. Then we can evaluate the program at the end of that 30 days.

This program will work in tandem with the PNK rewards program.

What do you all think?

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Good idea, i also think that all the products that have been funding by dxdao, omen, mesa, etc, to generate fees for DXD holders even if its a very small %

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I think DXswap can be the leading example of this. After all Uniswap is leader in revenue, and I think this is where DXdao should try to compete: https://beta.tokenterminal.com/

Hopefully Mesa IDOs will lead to liquidity on DXswap which will lead to increased fees.

For Omen, I’d like to see more users and trading volume before adding any more friction, but fees there I think also makes sense in the long run. If we do want to introduce a fee now, I think it should come out of the winners redemption rather than trading or liquidity providing.

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I’m afraid it would easily gamed and make the dxDAO look bad.
In order to incentivize trading, maybe the dxDAO could provide liquidity to a few markets whose odds are likely to move as events progress.
The capital used to do that would partially be consumed by impermanent loss, but it would basically acts as a subvention.

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Yeah, I like the idea in theory, but you can just wash trade your own market and suck up all the rewards, no?

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I think there is a way to do it that can not be gamed.

Let’s say the Rebate is 2%. This can not be gamed.

Let’s say the rebate is 3%. Some of this 1% potential profit goes towards paying gas.

If you do a big enough trade, that the 1% is higher than the gas cost, this will move the market price. Movement of market prices provide opportunities for more traders.

As noted above, one safety mechanism to put in place would be that we could implement a rule that the trading has to be done on one of the existing Markets as of today, Aug 18, 2020.

Currently, large amounts of PNK are being paid out for LPs but this is not leading to trading.

I am not sure dxDAO providing liquidity incentivizes trading. It has not proven true that larger liquidity brings trading.

Why not try another approach as an experiment?

1 Like
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Anyone else have an opinion on trying this?

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It seems like a decent idea, though wash trading is still a concern, what about more marketing Omen more? The volume is already superior to Augur but no many really know about it.

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Thanks @CLCL good points.
why would someone wash trade if we are covering their trading fee + Gas fee?
They wouldn’t make any money.

We think people are mainly not using Omen recently because of Gas fees. Are you?

Also, this is in additional to trying marketing. Well, we can use this in marketing too.

We should try bunch of different marketing tactics too. Have any ideas?

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I love this idea :slight_smile:
We could indeed offer a refund of max X $ of network fees per day/week/month to attract small gamblers for which network fees are just 80% of their possible gain :confused:
Making this refund in DXD could also be used as a marketing campaign for DXDao.

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I think at this point using Omen is already really profitable (160% APR in PNK rewards, which means that people can provide liquidity even losing a bit of money to traders as it’s compensated by the PNK rewards).
I think we need more communication and to capitalize on ongoing event (“What will be gas price at time XXXX?”, “Will Chef Nomi give back the money?”, etc).

Current reward program had one address getting most of the pool (https://docs.google.com/spreadsheets/d/1B2OoUFonyZ2hkf8MIwp8bLMWjyp4nrCKPSnT-zaWmCc/edit?usp=sharing). We need more com and community management. I think we should onboard one full-time Omen product owner to both dynamize the community and coordinate for updates.

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I agree that given the PNK program, it is super smart to provide liquidity on Omen right now.
The main issue I see is people stopped trading because of high gas prices.
We are experimenting to see if sponsoring gas for users of Omen opens the door for people who were not using it because of gas.
Personally, I feel that if gas was say <50 gwei for the past two months, we would have 500+ active users creating awesome fun markets like you suggest and trading on these.
At this point Liquidity is not the main issue.

1 Like