DOV Liquidity Rewards
Earn POL Tokens by providing buy side liquidity to DOVs
The DOV liquidity rewards program is designed with a clear objective of:
  1. 1.
    Incentivizing the market makers to provide liquidity for DOVs
  2. 2.
    Enhancing APY for investors by maximizing premium per DOV
The amount of POL Tokens distributed to market makers (MMs) is based on a formula that rewards a combination of the highest bid, i.e. premium paid and the number of option contracts for which liquidity is provided by the MM. If multiple market makers have bidded with the same (highest) premium, they all will qualify for the DOV liquidity rewards.

Working Mechanism

The Cobb-Douglas function calculates how much POL Token is rewarded to each MM during an epoch.
Rewards, r is equal to
Where w is equal to
Here,
In essence, this allows market makers with the highest bid to farm POL tokens equal in value to the premium they have paid in the auction process.

FAQs

Who is eligible for DOV liquidity rewards?
All market makers are eligible for DOV liquidity rewards.
The Polysynth protocol is unavailable to users in the United States and other restricted territories, as defined in Polysynth’s Terms of Service.
When can we claim our rewards?
DOV liquidity rewards are computed and paid weekly every Friday. All rewards have a 90-day lock-up period followed by a 90-day release period with a daily vesting schedule.
Why is our liquidity reward less compared to the formula?
The total DOV liquidity reward is capped at 100,000 POL per 7-day weekly cycle. As such, if the total rewards across all MMs for the weekly cycle is more than 100,000 POL, everyone’s reward is scaled pro-rata such that the total rewards remain capped at 100,000 POL per cycle.
What happens if the DOV cycles are bi-weekly or monthly?
For DOVs where expiry is bi-weekly or monthly, the bid quantity of the highest bidding market maker is split equally among the number of weeks to calculate weekly liquidity rewards.
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