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🔬 Liquidity Rewards in Depth

Learn how liquidity rewards work, including core mechanics, minimum size cutoffs, max spread rules, and how to earn USDC payouts daily.

💧 What are liquidity rewards?

Liquidity rewards are USDC payouts provided to users for placing limit orders that sit on the order book and make trading smoother for everyone.

More resting orders in the order book = steadier prices, faster matches, and a better trading experience for all.

💧 How Liquidity Rewards Work

USDC rewards are provided for placing qualifying resting orders within eligible markets, as specified on the Rewards Page. You can also check your accumulated rewards for the day on the rewards page.

⚙️ 1.0 Core Mechanics

  • Orders must meet the minimum order/share size (e.g ≥50 or ≥200 shares, listed on rewards page)
  • Orders must be inside the reward zone (midpoint ± max spread).
  • If there is no qualifying bid or ask, no rewards.

📏 1.1 Minimum Size Cutoff

  • Only orders that meet the minimum share size (e.g 50 or 200 shares) count toward rewards.
  • Best ask = the lowest sell price where the total number of shares offered is at least the cutoff.
  • Best bid = the highest buy price where the total number of shares offered is at least the cutoff.
  • Rewards are only based on the midpoint if both a valid bid and a valid ask exist.

📏 1.2 Max Spread

Your orders must be inside the range of the max spread around the MidPoint to qualify:

Bottom=MidPoint−max spreadTop=MidPoint+max spread\text{Bottom} = \text{MidPoint} - \text{max spread} \newline \text{Top} = \text{MidPoint} + \text{max spread}

💧 1.3 Example of Earning liquidity rewards:

Rules: Minimum size = 50, Midpoint = 0.50andMax−Spread=0.50 and Max-Spread = 0.02:

The following orders will earn liquidity rewards if a limit order of 50 or more shares are placed:

  • Example 1) Buy $0.48 (bottom of max spread).

  • Example 2) Buy $0.52 (top of max spread).

💧 1.4 Double-Sided Liquidity Rule

  • When the midpoint is within 0.10–0.10 – 0.90 (e.g., 0.11or0.11 or 0.89), you can earn rewards from just one side (bid or ask).
  • When the midpoint is below 0.10orabove0.10 or above 0.90 (e.g., 0.09or0.09 or 0.91), you must provide liquidity on both sides (buy and sell) to qualify.
  • This prevents one-sided markets in near-certain outcomes from unfairly collecting rewards.

📏 1.5 Additional Rules

  1. No Qualifying Orders = No Rewards
    • If no user’s orders meet the rules in a market, there are no rewards for that day.
  2. Real-Time Calculations
    • Rewards are re-checked every minute as long as your orders stay valid.
  3. Active Markets Only
    • Liquidity must be provided only on ongoing markets to qualify. Pending, ended, or resolved markets don’t pay rewards.

Example of orderbook and orders that can be placed to earn liquidity rewards:

Learn more

Rewards are paid out automatically every day at ~midnight UTC.

To read more about the specific calculations and formulas that determine rewards, visit our Liquidity Calculation Equations