tl;tr: Healthy activity from wide a range of accounts creates the best reward outcome. Bots, if used properly can contribute and benefit from this.

Every 216,000 slots a new win map is produced. This is a VRF map of the next 216,000 win hashes on each corresponding future slot. 

The win map is extended with a weight on each slot that factors a programmable luck score, filtering out wins that have low (below 4) luck score.


When multiple swaps occur on the same winning slot, all qualifying winners (luck filtered) receive rewards.

Rewards are designed to promote productive activity. Combating 

 on reward pools to favor productive activity is a difficult challenge to solve for. We approach solving this using a conditional ruleset which defines the qualifying parameters adjusted by market based governance largely scoped on Futarchy (

https://mason.gmu.edu/~rhanson/futarchy.html

). Abstracting manual voting is cumbersome - instead utilization gauges throttle the reward parameters across time weighted activity (bot-resistant). These weights include:

Base reward multiplier - multiplier of calculated reward (max 10x). This value increases with more diverse accounts producing positive momentum (buy activity) and volume. 
 

Volume qualification - threshold of qualifying volume of each winning transaction which is eligible to receive a reward. One can indeed have a winning hash and not receive reward because of luck or volume of winning transaction.
 

Momentum weighting - time weighted (bot-resistant) upward momentum (buying behavior) positively affects other gauges. Downtrend momentum negatively impacts rewards by raising volume qualifications. 


Reward pool funding rate - while the funding rate of reward pool is largely based on transaction volume, activity from liquidity mining has a strong impact on reward pool growth. 

The winning, qualified activity is queued in via the 

. The reward routers consideration of market sell-offs order-match users to dollar value rather than token amounts.

Luck is a score that is calculated from the reward merkle. Luck adjusts at the account level based on activity. Luck runs 3,000,000 slots back giving it self healing for luck-exhausted accounts. This activity includes:

Tips & Account transfers (Hash boosting, Liquidity Mining)

Bots are good if the bots are producing new positive activity. Positive activity is rewarded. 

Swap Harder

 - a creative way to establish a long position using LP with a built-in take-profit mechanism, this explores the method of using LP to go short on any ticker.

There are two types of positions a trader can take in a market: long and short - either buy an asset (going long) or sell it (going short). Rethinking impermanent loss exposure in a single sided LP position allows one to take such a position (long or short).

A short position is the exact opposite of a long position. The trader hopes for, and benefits from, a drop in the price. Executing or entering a short position is a bit more complicated than simply purchasing the token.

If I am short ETH, and ETH is $1.9k, then you would create a single side position, out of range, BELOW the current tick (price) and supply it to the range I believe ETH price will go down to. When creating the position, the ratios would be:

0% ETH, 100% USDC

Once the position is in range it will start earning fees (a feat novel to using LP to go short). As traders swap taking the price downward, they are providing ETH and the position is giving them USDC allowing the position to fundamentally buy the short price. This is also DCA like.


In the volatility of the market, while the position is still in range, the buys of ETH, returns the USDC to your position giving you USDC in return. 

If your exit target is reached, your LP position will be 0% USDC and 100% ETH, effectively out of range - allowing you to get the discounted ETH to strategically re-enter the market with.

If you go short via LP,  you should consider what your next move is when coming out of the trade to turn a profit with your discount purchased tokens.

Getting creative, you could estimate the moving average APY on swap fees and borrow additional ETH for a net arb making it a levered LP perp.

LP Short

The Smart Reward Router is a novel approach that optimizes reward distribution value routes by finding the most efficient paths across liquidity pools for rewards based on dollar value.


Uses data from registered keepers (Jupiter, Uniswap, Radium, CoinGecko, and Dextools) to track and index time-weighted average prices in a oracle


Analyzes available liquidity in various POL (protocol owned liquidity) pools


Factors in slippage, price impact, and network fees to determine optimal routes


Automates pool liquidation when necessary (swapping tokens into the primary reward tokens liquidity)


Long-Live execution - retries quotes in USDC value rather than token amount to adjust for volatility of net token value.

The router continues to evolve with use and protocol versioning.

The Price Oracle component of the router updates base rates from keepers every 800ms from various providers.

A key aspect is how the router handles reward execution - if a user earns a $12 reward, the router will either find the most liquid route against the reward pool or queue the transaction for a reattempt rather than executing a high-slippage transaction that would deliver significantly less value to the user.