Ithaca Beta is Here
We are thrilled to announce the completion of our Open Alpha phase, and the official launch of Ithaca Protocol in Beta. Thank you to everyone who tested the product on testnet as well as big thank you to our users on mainnet. We are now ready to take the next step.
Most crucially, more liquidity available — over and above the financial engineering inherent in the Ithaca Matching Engine — will allow many more users to reliably execute on their ideas.
We are officially launching an airdrop program. An eventual token launch will incentivize liquidity, reward early adopters and advance the development of the Ithaca ecosystem.
Season One - Points System
In order to battle-test the Ithaca Ecosystem tokenomics and incentivize growth ahead of a token launch, we have developed a transparent points incentive program.
Summary
You can earn points for trading and engagement according to transparent formulas.
Tokens will be issued in proportion to points earned ; Season One to distribute up to 2bln points.
Airdrop at the end of Season One.
Timing of airdrop and TGE will be subject to protocol traction and market conditions so as to optimize ecosystem value.
Season One Airdrop will distribute 2% of the total token supply.
Earning Points
Participants can earn points through various activities categorized into three streams:
Trading Points, Engagement Points and Special Points. Trading Points reflect the ecosystem’s long term incentive compatibility enforcement mechanism and embed reward adjustment according to liquidity creation. Engagement and special points are targeting community growth during Season One. Engagement and Special Points will only be activated subject to protocol activity (more information on activation criteria later in this document).
Points are awarded once a day.
Below is a more detailed breakdown of each incentive stream. As we progress, adjustments to these might be announced based on community feedback.
Trading Points
Trading incentives encourage participation in the protocol. Points can be earned by executing transactions (fills) and by submitting orders (orders). Orders not executed are rewarded for thickening markets through the provision of background liquidity. Higher incentives apply to 2-way orders that are expected to be filled as the market moves.
Fills
Points for filled orders are awarded based on volumes submitted.
Points earned for fills are based on the volume of each fill divided by the base volume times a points multiplier of 1,000.
Fill Points = ( Fill Volume / Base Volume ) * 1,000
Base volume per product:
Digital Options: 20 USDC
Vanilla Options: 0.2 ETH
Forwards: 0.8 ETH
Orders
Points for unfilled orders are awarded based on proximity to filled price or theoretical model mid price. The closer the order is to either the executed price (or the theoretical mid price if no fill took place), the more points earned.
Moreover, the system differentiates one-way and two-way orders to encourage greater liquidity provision.
One-way order: an order to either buy or sell that does NOT have a corresponding opposite side order in the same product and auction
Two-way order: an order to either buy or sell that HAS a corresponding opposite side order in the same product and auction
Same product here means the product matches payoff, strike and expiry.
One-Way Order Points
Points for one-way unfilled orders are awarded based on the following formula each day.
The formula has three components.
The first term is a scaling factor based on the number of auctions for which that order was live on that day. An order open over several auctions will earn more points. However, each passing auction awards slightly fewer points; ‘ lazy ‘ orders get rewarded relatively less.
The second term aggregates the order total volume, considering each auction as a separate order and scaling the order size based on its proximity to an executable price.
The third term is just a unit adjustment factor to convert volumes into points.
Two-Way Order Points
Two-way order events are order events that have another order event in the same auction and product matching payoff, strike, expiry and with an opposite side.
Points for two-way unfilled orders are awarded based on the following formula each day
The formula for two-way orders is similar to the one-way order except for the scaling parameters. Open two-way orders receive more points, and the proximity scaling is based on the proximity of bid and offer prices rather than on the proximity to the clearing price.
Bespoke Trading Incentives
While retaining the overall incentives framework, within each season we will be introducing campaigns with additional incentives for specific products.
Ahead of Ithaca offering margin lending, bespoke incentives will focus on the below instruments that tie up relatively more collateral in the absence of users utilizing Ithaca portfolio collateral optimization framework.
Selling (single-leg) Calls and Digital Calls & Risky Earn with ETH collateral - 5% bonus points earned per day till expiry
Selling (single-leg) Puts and Digital Puts & Risky Earn with USDC collateral - 2% bonus points per day till expiry
Dated forwards - 0.5% more per day till expiry
Engagement Points
Social Engagement
During Season One, users will be able to earn points through social engagement activities.
Each social action will be awarded points based on the following schedule:
Connect Wallet: 3,000 points
Twitter: 1,000 points
Telegram: 400 points
Discord: 350 points
Farcaster: 250 points
Point Activation - Sybil Resistance
Our point system is designed to reward activities that genuinely contribute to protocol success and ecosystem growth. Recognizing it is easy to exploit with sybil attacks social media and wallet connection incentives, we will follow best practices set by various airdrops in using ex-post sybil resistant methodology, vigorously excluding offending wallets from the airdrop. However, we also recognize these actions have false positives and are inevitably imperfect.
We therefore aim to set a new standard in using ex-ante points validation mechanisms to ensure a transparent and fair process is ensured by the incentives themselves.
Towards that goal, any wallet wishing to claim engagement points, must activate those points by earning a minimum of 5,000 trading points. This would be for example the equivalent of buying a 1 ETH notional call option or a 100$ notional digital call option (and correspondingly much lower premium expenditure).
If any user at any point feels one cannot afford the premium we encourage them to get in touch and join our “Argonaut” program for new traders, which makes a community fund available to participants to trade with.
Referrals
Users will receive a referral code to invite people to the platform and can earn 20% of their points. The share of points a user receives from their referrals will be calculated according to a geometric series, governed by a referral percentage (20%) and a referral chain (2). The referral percentage consists of the share of points earmarked for referees, with the referral chain expressing the number of subsequent referees who will receive referral points.
Referees will earn referral points for all activities their refereed users earn on protocol for a time period to be defined.
Referral points follow the same logic as standard points with regards to activation. They will remain inactive until the refereed users earn 5,000 trading points thereby activating them.
Special Points
In addition to Trading and Engagement points, a pool has been reserved to award points to users who go above-and-beyond in their participation in the protocol and community. These will be distributed to those users who join campaigns and earn badges in the platform.
Stay tuned for opportunities to earn these points as these may change over time.
Badges
Users will be able to earn badges by taking certain actions on the platform. There are five badge categories:
Product Badges - For trading each product in the platform from apprentice to pro
Trader Badges - For hitting certain volume milestones
Community Badges - For taking community actions such as referrals
Activity Badges - For engaging in specific activities such as tweeting
Special Badges - Special campaign badges, such as daily leaderboard achievements
We will set aside discretionary points for up to 30bps of total supply to align badge related activity with granted rewards, we will not hesitate to spend time manually to reward behaviors that will contribute to community and user growth.
Marketing Campaigns
Points have been earmarked for marketing campaigns by our marketing team. These might be giveaways we have done over twitter or discord, or through marketing platforms.
"Halvings"
Beyond the initial launch, our incentive system includes a controlled emission of incentives according to a fractional reduction schedule. For each points category, the emission rate will be reduced proportionately once a threshold of no less than the relevant fraction of the points or tokens has been awarded so as to incentivize early users and ease off incentives as the protocol matures and achieves self-sustaining momentum. We envisage at least 6 fractional reduction / “halving” seasons over the lifetime of our airdrop incentive programs aligning our emission structure with naturally assigning more value to early adopters and evangelizers.
Why a Token?
A token will allow the Ithaca Protocol ecosystem to align stakeholder incentives.
Our tokenomics will prioritize utility, sustainability and secure operation of the protocol. Our team can call upon extensive crypto market mechanism design expertise and benefit from ongoing guidance by our stakeholders. Watch this space for further announcements.
Visit us at app.ithacaprotocol.io
