Phase 3

Phase 3 will last 46 sequential Epochs of 4 weeks each, with a bonus pool of 1,000,000 BKT per Epoch.


For each Epoch, we introduce a split of the bonus pool which is available to be earned by two participation methods. We continue to reward trading using the methodology of Phase 2, and introduce a progressively larger focus on rewarding quoting in Blocktane’s order books using a new methodology.

For the order book rewards, we only reward orders in any Blocktane orderbook within 0.5% of each of the bid and ask side of the midpoint of an orderbook. Any orders further away from the midpoint of an orderbook do not receive any rewards. Rewards are rewarded to a combination of the proximity of the quote to the midpoint, as well as the amount of assets quoted. Larger quoted quantities at 0.49% from the midpoint may receive the same reward as smaller sizes extremely close to the midpoint, for example.

Each hour within an Epoch at a randomized time, we take a snapshot of all orders within a 1% total spread around the midpoint. Each order’s dollar equivalent value of quoted quantity and its price versus midpoint is recorded.

For each order we complete the following calculation:
[(1 - (spread distance in % x2)] * $ amount of value quoted
For example, consider the following fictional orderbook of ABC/USDC:
The best bid is 99.80 and the best ask is 100 USDC per ABC. The midpoint of this book is therefore [(100-99.8)/2]+99 = 99.9 USDC per ABC.

A 0.50% distance from the midpoint is therefore 0.499 USDC, and therefore the maximum distance from the midpoint which will be rewarded is 99.301 USDC on the bid side and 100.299 USDC on the ask side. Any orders further than these prices from the midpoint on their respective side of the order book would not earn any rewards.

Table C: ABC/USDC order book 


Bid Side

Ask Side

Order 

User

Amount of ABC

Price of order

Price of order

Amount of ABC

User

Order

1

User AA

1 ABC

99.80 USDC

100 USDC

2.3 ABC

User BB

4

2

User BB

2.8 ABC

99.60 USDC

100.40 USDC

1.9 ABC

User AA

5

3

User CC

1.5 ABC

98.00 USDC

101 USDC

2.0 ABC

User CC

6


Applying the formulas above we can calculate the points earned. Using order number 1, here is the calculation:

Spread distance expressed as a percentage is: (99.9 - 99.8)/99.9 = 0.1001%
The amount quoted for this order in dollars is 99.8 x 1 ABC = $99.80

The points calculation therefore is [(1 - (0.1001 x 2)] * 99.8 = 79.82004 points.

The results for each of the orders is:
1 is 79.82004
2 is 111.3845045
3 is 0
4 is 183.953954

5 is 0

6 is 0

Zero value outcomes are a result of those orders being greater than 0.50% distance from the midpoint of the orderbook.

Summed per user quoting, the following points would be earned:

User AA = 79.82004
User BB = 295.338458
User CC = 0

The methodology described is applied equally to all order books once per hour. Any user may quote in as many order books as frequently as they may desire in order to increase their total sum of points earned during an Epoch. Placing larger quantities of capital at risk is a few order books or distributed amongst many order books may result in the same points score, leaving users with the discretion to manage their quoting however suits their strategies and risk appetites.

The total number of potential points that may be scored by users will therefore also scale proportionally with the amount of capital quoted amongst Blocktane’s order books. If increasing amounts of capital are quoted in Blocktane’s order books over the course of future Epochs, it is also likely that any single order for a given amount of capital during an Epoch will represent a smaller earning of the prize pool in later Epochs.