> For the complete documentation index, see [llms.txt](https://support.power.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://support.power.trade/ptf-token/token-specifications/trading-reward-programme.md). # Trading Reward Programme Consider the following notation:
TermDefinition
R(h)Reward for a specific trader h.
RTotal Trading Reward for the epoch for the respective product. This reward will be split amongst all traders, with allocation dictated by a formula.
fFees paid by the trader on this product over the epoch.
w(h)The score of the particular trader h over the epoch.
d(h)A trader’s average open interest measured as every minute (at random) across all markets for a given product over this epoch.
kTotal number of traders in this epoch.
alphaA constant which balances the geometric weight between fees versus open interest. The value is set at 0.7.
### **Futures/Perpetuals** The formulas for calculating rewards for trading are as follows. Each trader $$h$$: $$w\_h= f\_h^{\alpha} \times d\_h^{1-\alpha}$$ $$R\_h= R \times \frac{w\_h}{\sum\_n w\_n}$$ with $$n = 1, 2, ..., k$$ * The total reward '$$R$$' is in PB tokens. * The formula for '$$R\_h$$' specifies how the reward for that period is split amongst all participants. This is like game theory: if you are the only player in town, you get all the bounty, so long as you have at least a bit of an open interest over the period and at least done some trading. * For more participants, it splits the bounty proportionally to their **level of participation,** measured as a function of fees and open interest as described by the formula. ### **Options** Notice that for Options, the open interest is measured as follows every minute by: $$d\_h,*{min} = \sum*{i=1}^n \sum\_{j=1}^m {O(C,K\_i,T\_j)+ O(P,K\_i,T\_j)}$$ $$d\_h=\sum\_{j=1}^J d\_{min}(j)$$ The time of snapshotting the open interest is **random** over the minute, so to avoid any systematic bias. * Net the Open Interest by strikes and expiries, for each call and put:\ \ $$O(C,K\_i,T\_j) = abs(netPosition(C,K\_i,T\_j))$$\ \ $$O(C,K\_i,T\_j) = abs(netPosition(P,K\_i,T\_j))$$\ \ Where Open Interest refers to the net Notional Value of the particular option. * So for each strike, expiry and call/put category, net the positions and take absolute value (assuming we are indifferent to net long/short). * Client Total Open Interest: * Open interest, sampled every minute:\ \ $$d\_h,{min} = \sum{i=1}^n \sum\_{j=1}^m {O(C,K\_i,T\_j)+ O(P,K\_i,T\_j)}$$\ \ measured as an average over every minute across the month/14 days (sampled randomly in every minute).\\ * $$d\_h=\sum\_{j=1}^J d\_{h,min}(j)$$ where J is the total number of minutes over the period (14 days ). * $$f\_h$$ = total fees$ paid over the month/14 days, but fees taken in absolute value. * $$\alpha= 0.7$$ * Trader score $$w = f^{\alpha} \times d^{(1-\alpha)}$$ * Portion of reward per trader:\\ $$R\_h= R \times \frac{w\_h}{\sum\_n w\_n}$$ with $$n = 1, 2, ..., k$$\\ * Rationale for the way to account for options: a long call/short put same strike results in a synthetic forward, so Put/Call cannot be accounted for in same bucket. * Likewise for calls with same expiry and different strikes: they represent a "spread" which means they are valid trades, not netting out. Similar for calendar spreads. * By taking into account all products, we are incentivising traders to have positions across all strikes/expires. ### **Spot** * Notice that traders would be rewarded for trades executed, hence AMMs would only be compensated if their range is relevant and takers trade over that period. * Even though fees for Market Makers are zero, a "virtual fee" to reward makers is used for the reward calculation when their trades are executed. This is for now set at: * $$f^{virtual}\_{maker}=0.07%$$ * The system keeps track of which trades are from maker / taker. * For spot, $$\alpha$$ = $$1$$. * Trader score $$w = f^{\alpha}$$ , where $$f$$ is different for trades which are market orders (taker) or limit orders (maker). * Portion of reward per trader:\ \ $$R\_h = R \times \frac{w\_h}{\sum\_{i=n}^N w\_n}$$ with $$n= 1, 2,..., k$$