Contents
Contents
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Overview

Drift Market Maker Rewards are now live as a part of the wider Drift Points program. This program is designed to incentivize Market Makers and Liquidity Providers.

Makers will earn a percentage of the total Points pool, with the rest of the Points Pool allocated to other actions on the exchange such as trading as a taker.

This article describes the criteria for earning Maker points specifically. For Makers, scoring is calculated based on 2 factors:

  • maker volume and
  • liquidity depth score

The Market Maker Program aims to supercharge liquidity on the exchange, as well as:

  • Incentivize traders to provide liquidity across the protocol
  • Onboard market makers and institutional traders
  • Incentivize use of Just-in-Time liquidity
  • Attract liquidity on Drift orderbooks across all markets to service takers

How to Participate

Participation will involve running active market making strategies on Drift’s orderbook (quoting via post-only limit orders) and running a Just-in-Time bot.

If you are a passive depositor, you can also deposit into actively managed market making vaults to earn points. We’re working with Circuit Trade, which is a market making vaults protocol to allow users to passively participate in vaults while earning points directly.

Note that your DLP liquidity will also be counted for maker points that are earned by the vAMM depending on the below criteria.

Criteria for Earning Maker Points

Market Makers will earn Maker Points based on two-point buckets — Maker Volume and Liquidity Depth. 2 million points will be given away in total, with roughly half allocated to Maker Points. The goal is to target fills close to Oracle price as well as top-of-the-book liquidity available for takers.

This exact scoring method and distribution is still being iterated and is subject to change.

1.  Maker Volume Points (70%)

‍All participating market makers make their pro-rata split of Drift points per week based on their relative maker volume per market, according to:

Given the efficiency and scaling improvements of offering JIT liquidity, MM volume that uses JIT fulfillmentwill get a 10x multiplier on their volume score. Thus matches performed by the keeper network earn a relatively smaller score.

2.  Liquidity Depth Points (30%)

‍The Liquidity Depth score awards market makers who provide more liquidity at the top of the book. All participating market makers make their weekly pro-rata split of Drift Points based on their relative liquidity score within each market. This score is broken down below.

This equation can be broken down into:
1. MM Score over Period

This is the score for the market maker in a specific market with n snapshots over the period.

2. MM Order Score per Snapshot

The MM Order Score calculates the weighted sum of the size of the market maker's ask orders at various price levels. It takes into account the quantity (Q) of lower of liquidity available at that bid, ask bracket.

An individual MM’s liquidity within a bracket for a side (bid or ask)

The bracket groups are defined as N bps from either the best best/offer in the market or the higher bracket. N is defined in the table below:

Bracket Logic examples:

  • The best bid/ask is considered in bracket A. Also, any order within 2.5 bps of the best will be bracket A.
  • Any orders 15 bps below the top bid will be in Bracket C.
  • Any order 41 bps from the best bid/offer will not be counted.

After each week, the distribution of points is calculated by the weighted sum of the volume score multiplied by Liquidity Depth Points.

Market Specifications

The percentages of points allocated to each listed market on Drift are defined below as a lower bound and updated consistently to reflect any changes. A full schedule of trading fees and rebates can be found here. Minimum points will be given to trading activity for each market.

The proportion of points given per market will update per week and will be based on the average split of volume across the last week.

A full schedule of trading fees and rebates per market can be found here.

Points Rewards

Maker Points will be roughly 50% of the total points pool.

Drift will assign maker points for liquidity provided to the protocol via participation in the order books and Just-in-Time liquidity. While this Program is designed for institutions and quant traders alike running algorithmic strategies, it will also reward any DLP liquidity as well as depositors into third-party Market-Making vaults run by Circuit Trading.

Leaderboard + Individualized Dashboards

To enhance the experience for our Market Makers, Drift will be rolling out a leaderboard to track their performance and see how they stack up against others.

Additionally, each Market Maker will have access to their own dashboard, providing them with insights on their performance.

The goal of this initiative is to provide greater transparency, accountability and support.

Get Started

If you would like additional resources to streamline the process and provide you with a better experience, please fill this form if you are interested in participating in the MM rewards program. The expected response time is 24-48 hours.

If you are a Market Maker doing >5% volumes on the exchange, we will provide you with a VIP MM service that ensures swift and personalized assistance.

Have questions? Contact the team on Discord.

Integrations & Docs

Here are the technical integration docs with our current Typescript & Python clients as well as our REST API docs:

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Happy trading!

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