I’m introducing below a SRM incentive proposal aimed at increasing liquidity towards Serum derivatives, and composability across the wider Solana and Serum ecosystems, managed by the 01 team.
For context, 01 is a derivatives exchange fully composed over Serum, generating full fees directly to Serum. 01 is capable of supporting up to 50 different collaterals, and up to 100 different derivative markets, all cross-collateralized and cross-margined. 01 is also the only venue across crypto to offer orderbook-based power perpetuals on Serum, currently SOL-SQUARE is available, with more markets coming in very soon. 01 has to date generated over $500M volume from futures for Serum.
A month ago, 01 successfully launched a $100k+ grants program with the Solana foundation, distributing grants to developers across the ecosystem to compose over 01 and subsequently Serum.
01 has also launched the first ever derivatives automated market maker, called ZAMM. To date, ZAMM has over $10M+ in TVL contributing towards liquidity to Serum derivatives.
Serum has undoubtedly built the most powerful spot liquidity engine across the entirety of DeFi. However, the Serum ecosystem is missing a huge derivatives market. In fact, FTX generates 5x more volume on their derivatives trading than their spot trading. The derivatives space is an incredibly large untapped market for Serum, and we hope to change that with our 01 Serum derivatives incentive proposal.
The purpose of this grant is to specifically incentivize providing liquidity to Serum perpetual futures. These include the SOL, BTC, ETH, AVAX, APE, GMT, NEAR, SYN perpetual markets. These markets generate full Serum fees.
Makers are rewarded based on depth, volume and open interest, similar to Mango’s reward system for spot and spot SRM. Wash trading prevention checks will be put in place as well.
A portion of the grant will also be set aside for leaderboard rewards for top PNL traders.
Similarly to Zeta’s proposal, the SRM rewards will be distributed under a lockup period, to incentivize long term liquidity provision and token community alignment.
The ask is for $2M SRM to support increased liquidity for Serum derivatives, to be distributed over a period of 16 weeks. The trading activity as a result will be generating full Serum fees as well.
As a final note, we’ve been working closely with the Serum team and community since inception, we’re really excited to see the Serum derivatives product line grow and look forward to hearing everyones’ feedback.