Taker Incentive Proposal - Looking for feedback

General
1

This document outlines the plans for the Taker Incentive program. This will not go through governance as the budget was already approved through governance. The point of this post it to get feedback from the community.

Overview:

The program will award tiered incentives to the highest-volume takers, spurring the growth of taker strategies. By boosting taker flow, the initiative is designed to deepen overall liquidity and make the platform more attractive to market makers.

The total reward pool for the first month will be 250,000 DRIFT. This amount may be changed for future months depending on the performance of the program. The Drift Allocated to the award pool will come from the Drift Incentive Fund passed through governance here. DIP 5: Fund the Drift Incentive Fund

Distribution:
The program will consist of a fixed rewards pool each month distributed to top takers by volume according to tiers. Tiers will be defined by placement in the taker volume leaderboard.

Placement in tiers will be based on cumulative taker volume throughout the month. Rewards will be distributed at the end of the month.

Given that some markets are zero fees, obvious wash trading will not be counted towards taker volume. Inclusion in the rewards distribution is up to the discretion of the Drift Foundation.

Tiers:

Tier % of rewards per user Number of users % of rewards for Tier
1 8% 5 40%
2 3.5% 9 31.5%
3 1.5% 12 18%
4 0.75% 14 10.5%

1600Ă—742 85.7 KB

Above is an overlay of % of rewards per place compared to the % of taker volume done by top addresses. This rewards mechanism is top heavy to encourage competition and onboard more sophisticated takers.

1 Like
2

Quick and Dirty.

Rewards distribution and sophisticated traders?

  • 40 users seems quite small. I understand that it’s to attract sophisticated takers but opening and 5th and even 6th tier to get top 100, 250 users might be better. I feel like most smart money (sophisticated high volume users) are market makers; I could be wrong. Also what more incentive do high volume traders need? There’s already zero(!) trading fees on BTC. It’s hard to judge the success of that because we just ran into a bull run but volume. It brings up a nuance, do we care about BTC + ETH markets since they now have zero fees or primarily just SOL?

Inconsistent fleeting volume

  • Because it’s a monthly rewards program it potentially comes with some issues such as large spikes of volume towards the end of the period cutoff. If this happens and even if it doesn’t those who would otherwise try participating might not bother if they know some whales will just knock them off the podium at the last minute. Similarily I know you’re trying to attract big players but if you come in late you won’t even bother.

To solve this issue you could have a more complex scoring function to account for quality where quality is whatever you want but essentially consistency. E.g. number of trades, average size, unique days, time between trades, etc

You could also just shorten the program to be daily, this may exacerbate the issue mentioned and you might see whale volume in the last hour of each day. So then maybe every hour? again same thing? I’m not sure but we trend towards just a continuous rewards system somehow.

Loyalty + Tokenomics + Rant

  • Which brings me to my next point. Drift is like a company desperate for market share and so to incentive people it’s always putting on sales. But usually people just exploit the sale and move on. Bake this into the drift protocol. Reward users for using Drift and create a positive feedback loop. If I owned drift and I wanted to incentivize and motivate takers then I would do this but I wouldn’t cap it to 250k DRIFT. I would make it so that a percentage of the taker fees are used to continuously (or x time period) are used to buy back DRIFT tokens. This creates a constant buy pressure for Drift tokens. Now you reward users with Drift tokens but you say there’s a 14 day, 30 day (I don’t know) vesting period in which they are staked on your behalf. So you don’t get them right away but at least they’re still generating income. This benefits and looks good for the Drift protocol. Some users since they’re forced to stake essentially will grow to like it or just leave them indefinitely for whatever reason.

It’s a good proposal I just want to see the Drift Exchange and Token create positive feedback systems that are programmed directly into the protocol. Not these one off marketing campaigns.

2 Likes
3

“To solve this issue you could have a more complex scoring function to account for quality where quality is whatever you want but essentially consistency. E.g. number of trades, average size, unique days, time between trades, etc.”

Inconsistent fleeting volume

*” Because it’s a monthly rewards program it potentially comes with some issues such as large spikes of volume towards the end of the period cutoff. If this happens and even if it doesn’t those who would otherwise try participating might not bother if they know some whales will just knock them off the podium at the last minute. Similarily I know you’re trying to attract big players but if you come in late you won’t even bother.”

I agree with these ides. They are great points

The second idea has addressed another issue that seems to permeate the space especially airdrops, we saw that in the last drop. Rather the team acknowledges it or not these have systemic effects. I keep up with this space, because I participate in many across blockchains. We have to differentiate ourselves to keep the project incentivized. Kol’s matter outside of our bubble here. The project can have potential but sentiment matters! I urge everyone to keep the whole picture in mind outside liquidity. I think Cindy and the team have that locked down.

1 Like
4

We’re excited to see the Drift Foundation roll out this Taker Incentive program and commend the initiative to reward the most active contributors to on-chain liquidity.

At Vectis, we’ve been actively running JLP delta hedging and Funding Rate Arbitrage strategies on Drift, generating over $5 million in taker volume in the past month alone. As daily participants in these markets, we’ve experienced firsthand how vital sustained taker flow is to market health — not only for enhancing execution quality but also for strengthening confidence from liquidity providers and new users alike.

The design of this program — particularly the tiered, performance-based model — is a strong starting point. However, we believe there’s an opportunity to evolve it into a more systemic, sustainable rewards engine that benefits both traders and the DRIFT token economy.

A Few Suggestions:

1. Expanding Access Through Tiering

Limiting rewards to the top 40 takers risks excluding highly active participants who still bring meaningful volume. Expanding to include lower reward tiers (e.g., Top 100 or 250) could attract and retain a broader cohort of traders, especially emerging strategy builders.

2. From Campaign to Protocol Mechanism

This program is a powerful incentive — but it’s also a one-off. To truly compound its impact, we’d love to see Drift explore protocol-level mechanisms, such as:

  • Continuous DRIFT buybacks using a % of taker fees.
  • Staked reward vesting with built-in yield during the lockup.
  • On-chain loyalty metrics that unlock enhanced benefits over time.

These mechanisms would reinforce the long-term value loop between usage, token demand, and protocol stickiness — turning temporary incentives into lasting alignment.

We’re excited to participate in this first month and will continue scaling our Drift-based strategies. This program is a great step forward, and with a few thoughtful evolutions, it could become a cornerstone of Drift’s long-term trading ecosystem.

Let’s keep pushing the boundaries of DeFi infrastructure — together. :flexed_biceps:

— Team Vectis

1 Like