Launching Trade to Earn (T2E) on WOO X — Stake WOO to earn rebates on trades
Whether you are a pro trader tired of being dragged down by fees or a casual user looking for the best trading experience, WOO X is the place for traders who are serious about getting more out of their platform.
Introduction highlighting changes
Introducing Trade-to-Earn (T2E) on WOO X — a new feature for WOO X stakers that allows traders to earn rebates in WOO on taker orders placed manually. T2E will be live on March 21 as part of a revamped staking program on WOO X, adding additional utility for the WOO token and incentives for WOO stakers.
How does T2E work?
Taker orders, also known as market orders, occur when a trader accepts and fills their order at the best price offered in the order book. Taker orders are fast and convenient, especially on exchanges with tight spreads and deep liquidity. With T2E rebates on WOO X, users who stake WOO and trade manually (non-API orders) are able to earn a percentage of every trade ‘taken’ that executes against WOO X’s trading engine. This becomes additional yield on the WOO staked, allowing active traders the chance to earn even more for their contribution and participation in the network.
Practical Examples:
- Taker Rebate Example: Assume on January 1st, you traded $1M in manual taker volume on Jan 1st and the daily TWAP price of WOO was $0.5. If you are a Tier 4 staker and earn 0.15 bps taker rebate, then you will receive (1,000,000*0.000015)/0.5 = 30 WOO at 00:00 UTC on Jan 2nd.
- Yield Calculation Example: Assume you are a Tier 3 staker with 150,000 WOO staked and used the max rebate cap of $1,750 each month. Then assuming the average price of WOO was $0.5, the T2E APR obtained would be ((1,750/0.5)*12)/150,000 or roughly 28%. This is additional yield on top of the base staking rewards, referral rebates, WOO Ventures airdrops and other incentive programs. Note that the APR will vary based on the user’s amount of WOO staked, rebate cap utilized and the WOO price.
Making markets more efficient
Before you write this off as a marketing stunt, let’s have a look at how T2E is not only possible but also sustainable and deflationary for the WOO token.
Democratizing markets with zero fees
Most exchanges are forced to ‘tax’ taker orders and give deep discounts or rebates to the market makers, in order to ensure the market makers will remain trading there. WOO X, which aggregates liquidity from other centralized and decentralized exchanges, doesn’t need to subsidize these market-making teams. Instead, WOO X can pass the savings along to the everyday trader in the form of zero-fee spot trading. The result is that smaller traders, by staking as low as 1800 WOO, can get treated the same way that other exchanges treat their largest VIP clients.
Rewarding non-toxic traders
Here’s another issue many CeFi exchanges face — aggressive high-frequency traders (HFT) are rampant on other exchanges. These traders are toxic to a market maker, forcing the market maker to increase spreads to avoid losing money to them. Traditional CeFi exchanges don’t mind though, as they are happy to collect trading fees and the inflated volumes are great for marketing purposes. This leads to an inefficient market where market makers widen spreads and retail traders pay high fees.
Since WOO X doesn’t earn from fees, we are happy to ‘slow down’ toxic HFT traders with rate limits, hampering their ability to extract value at the expense of market makers and retail traders. WOO X can keep spreads tight and fees low, and the market makers can still take advantage of their aggregation strategies to earn revenue. A portion of this revenue then goes to WOO X, with half buying back and burning WOO tokens from the open market.
As a result, WOO X is incentivized to reward non-toxic manual taker volume with WOO token rebates. The more these traders trade, the more the network can earn.
Rebates are paid out daily in WOO alongside the base staking yields. Each trader has a monthly max rebate cap based on their staking tier. As taker rebates are earned, the user’s amount of eligible monthly rebates decrease until the cap is fully utilized. The max rebate cap resets at the beginning of each month. Users can obtain larger max rebate caps by increasing their staking tier.
Impact to WOO— a major update to tokenomics
But wait — won’t that be highly inflationary? Unlocking WOO tokens rewards could lead to more sell pressure, right? Let’s take a look:
First, manual taker orders on WOO X are generally a non-toxic form of flow, meaning that WOO Network’s aggregating strategies are able to consistently generate revenue from them. More taker orders mean more revenue, which leads to higher buybacks each month, making this a net-negative inflationary action.
Match and Burn:
To further offset inflation, WOO Network is announcing the beginning of a new monthly plan to match any T2E rebate given out and burn that directly from the Ecosystem Rewards pool. This action doesn’t affect the circulating supply, but it lowers the Fully-Diluted Value (FDV) and the number of tokens that could potentially enter the supply. This creates a positive feedback loop where WOO X users are encouraged to trade more in order to earn more, leading to the network burning more, incentivizing more users to stake, and thus, continuing the cycle.
Additional notes for revamped staking on WOO X
What safeguards are in place for WOO X?
WOO X will actively monitor traders earning Taker rebates to ensure they are not gaming the system. Additionally, the rate limits for manual orders limit the ability for traders to trade quickly and earn fees without taking on market risk. Lastly, WOO X reserves the right to review traders’ activity and remove benefits if malicious behavior is detected.
What happens to existing WOO stakers?
In recognition of early support, WOO X has ensured all existing stakers will have a seamless transition to the new staking program. Mirroring the transition from Closed Beta, all stakers will be grandfathered into new tiers as follows:
- Tier One and Tier Two > New Tier One
- Tier Three > New Tier Two
- Tier Four > New Tier Three
- Tier Five > New Tier Four
- Tier Six > New Tier Five, unless over 1.5M WOO where they become New Tier 6
This means all grandfathered stakers will be considered part of the new tier until they unstake tokens or increase their stake to reach the next tier above. Full details are available below:
More details on the program updates will be available soon on the WOO X Support Center.
Stay tuned for all WOO Network’s exciting developments!
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