Incentive Tiers and Rewards

Rewards calculations and referral tier benefits.

The Kwenta Referral Program is governed and tracked by Boost NFTs which are minted by traders. Traders are given the opportunity to mint Boost NFTs by Kwenta Affiliates through following a referral link.

Boost NFTs

Boost NFTs come in 3 types: Bronze, Silver, and Gold. The tier of Boost NFT minted by the trader depends on the Referral Score of the Affiliate at the time of minting.

Boost NFT Tiers

Boost NFT Contract: oeth:0xD3B8876073949D790AB718CAD21d9326a3adA60f

Bronze Tier Boost NFT TokenID: 0 0 - <100 referral_score

  • Traders earn a 5% boost to their $KWENTA trading rewards

  • Affiliates earn 50% of the amount of $KWENTA rewards earned by each trader they refer who has minted a Bronze Boost NFT.

  1. Silver Tier Boost NFT TokenID: 1 100 - <200 referral_score

    • Traders earn a 10% boost to their $KWENTA trading rewards

    • Affiliates earn 55% of the amount of $KWENTA rewards earned by each trader they refer who has minted a Silver Boost NFT.

  2. Gold Tier Boost NFT TokenID: 2 200+ referral_score

    • Traders earn a 15% boost to their $KWENTA trading rewards

    • Affiliates earn 60% of the amount of $KWENTA rewards earned by each trader they refer who has minted a Gold Boost NFT.

Minting a Boost NFT

Boost NFTs are minted by following a referral link. Real Kwenta referral links should look similar to this one:

When following a referral link, simply connect the wallet with which you intend to trade, and follow the onscreen instructions. A confirmation will appear when your Boost NFT is successfully minted. You may also view your Boost NFT in Optimistic Etherscan or Opensea. For security, please ensure the contract matches the address above before performing any interaction.

Important Notes on the Boost NFT

  1. Boost NFTs are minted based on the Affiliate's Referral Score at the time of minting.

  2. Boost NFTs are soulbound, and each wallet may only contain one Boost NFT. Boost NFTs may not be transferred or upgraded at this time.

  3. Although the Boost NFT itself does not change, all rewards associated with the Boost NFT may change via the KwentaDAO governance process.

Affiliate NFTs

Affiliate NFTs are awarded to those under special circumstances by the MarketingDAO, and may assist existing $KWENTA holders to set up referral codes from new wallets, be awarded to early testers or those contributing to the DAO, or be provided as part of a partnership with the Kwenta MarketingDAO for social media marketers and content creators. Please inquire in Discord for current opportunities.

Affiliate NFT Contract: oeth:0x6C3D5fA52A530b064BCD6CcD61778108Bee7AE37

Silver Tier Affiliate NFT - TokenID: 1 - nftScore: 100

Gold Tier Affiliate NFT - TokenID: 2 - nftScore: 200

Rewards Calculations

Rewards for both Traders and Affiliates are accounted for in one formula which allocates 10% of $KWENTA weekly inflation toward the rewards program. Traders earn a rewards_score based on weekly trading fees, and the trader's staked $KWENTA balance. A modified Cobb-Douglas function ensures that all traders earn some rewards, but those rewards increase as more $KWENTA is staked and more fees are paid.

Rewards are allocated based on final score, which is a calculation applied to rewards_score applying a Boost Multiplier for traders, and allocating an Affiliate Bonus for affiliates for each trader they referred who made trades during the weekly epoch. The raw formulas from KIP-84 can be found below:

  • rewards_score: rewards_score = fees_paid^α * (staked_KWENTA+0.1)^(1-α)

    α is a configurable value set by governance currently set to 0.7

  • final_score: final_score = rewards_score + (rewards_score * boost) + Σbonus

    Σbonus indicates that an affiliate earns a bonus value from each trader they refer, and are awarded a score based on the sum of these values.

  • referral_score calculation for an issuer: referral_score = staked_KWENTA + nftScore

    nftScore values will be included only if an affiliate holds an Affiliate NFT issued by the MarketingDAO

Example Calculation

In the following calculations, Jim is earning rewards from both trading and referrals. Jim has referred 2 traders who minted Gold Boost NFTs using Super Trader's link, paid $100 of their own trading fees, and minted their own Gold Boost NFT using the kwenta code. Jim stakes 249.9 $KWENTA.

This calculation is for 1 week of rewards.

  • rewards_score: rewards_score = 100^0.7 * (249.9+0.1)^(1-0.7) = 131.6

With a rewards_scored of 131.6 (rounded for simplicity) from trading, we still need to know the rewards_score value earned by each referred trader to make our final calculations. Let's use 2 example scores for Jim's referred traders, Divya and Ricky.

  • Divya: referral_score = 72.5

  • Ricky: referral_score = 21.2

    Note: Affiliate Bonuses are awarded based on a trader's referral_score before boosts are applied

Using these values, we can now calculate Jim's final_score.

  • final_score: final_score = 131.6 + (131.6 * 0.15) + [(72.5 * 0.6) + (21.2* 0.6)]

    Each referred trader's score is multiplied by 0.6, or 60%, to find the bonus awarded to Affiliates for Gold tier traders.

As one final step, let's simplify this equation to show the amounts earned by trading and the amounts earned by referral rewards to understand each.

  • final_score: final_score = 151.34 + 56.22 = 207.56

    Jim traded a lot, and earned 72.86% of his rewards from trading after boost, earning the remaining 27.14% from his referrals.

To find the actual $KWENTA rewards amount, we will need to know the total $KWENTA rewards for the epoch, as well as the total final_score of all traders.

  • Total Epoch Rewards: 650.9 $KWENTA

  • Sum of all Final Scores: 4988.89

With this information, we simply find the % share of Jim's final_score in relation to the total, and muliply it with the entire weekly rewards pot.

  • Total Rewards: rewards = (207.56 / 4988.89) * 650.9 $KWENTA = 27.09744 $KWENTA

    Jim earned ≈ 19.744 from trading, and ≈ 7.353 from referrals.

Estimated Rewards and Claiming

Although it is not possible to precisely calculate rewards until the end of the epoch due to the sum of all final_score values changing throughout, estimated rewards can be found during the epoch on the Staking and Rewards Dashboard. Once rewards are available each epoch, $KWENTA rewards from all sources may be claimed from this dashboard. All rewards are escrowed according to a 1 year escrow schedule, and early vesting fees are applied if the rewards are vested before the end of the escrow period. Be sure to stake your rewards in the Escrow tab of your staking dashboard to earn staking rewards.

Liquid Rewards and Fee Share

At this time, $KWENTA rewards are the only rewards source for the referral program, however the KwentaDAO has recently been approved for a grant to trial liquid $OP rewards for affiliates and may allocate future rewards in accordance with governance mandate. Traders referred now continue to earn from future rewards sources for the life of the referral program. Be sure to watch for Discord announcements to be informed of the latest developments.

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