XP System Breakdown
The first liquidity and risk-based NFT-native rewards scheme transparently attributing incentive weights by user risk tolerance and real-time market dynamics.
Mintify's XP System is open sourced and available on Github here.
Overview:
Earn Passive XP daily for each Key you hold.
Earn XP when making Direct Purchases under Earn+.
Earn XP by bidding and listing collections under Earn+ and having your bids and listings filled.
Tournaments: Holding multiple Keys increases your Blast XP (Tournament XP) earned starting at +10% for holding one Key, and incrementing by +1% for every Key thereafter
Main Leaderboard: Holding multiple Keys mirrors any XP earned across every Key that you hold (1 XP with 1 Key = 1 XP, 1 XP with 10 Keys = 10 XP).
Rewarding Risk-based Liquidity
Mintify’s Risk-Adjusted XP is the first liquidity and risk-based NFT-native rewards scheme transparently attributing incentive weights by user risk tolerance and real-time market dynamics to promote balanced liquidity across fragmented markets.
Risk-Adjusted XP is comprised of several modular formulas built to independently normalize different aspects of NFT liquidity. This perspective enables seamless comparison and automation of scaling incentives based on a collection’s unique demand for liquidity.
In short, the smaller the ratio of a collection’s market capitalization to its orderbook depth (bids and listings), the larger the rewards for users on the NFT Orderbook. Here's an example:
a) Market Cap $100k, Bid Liquidity $10k = High Multiplier
b) Market Cap $100k, Bid Liquidity $50k = Low Multiplier
Operating parallel to its modular NFT trading infrastructure, Risk-Adjusted XP allows everyday users to stay informed and make more educated trading decisions, while enabling power users to craft complex strategies through programmatic order execution and the Mintify Liquidity API (coming soon).
How It Works:
Position and Risk: The closer a user’s order to the floor price, and the less [buy/sell limit] order volume is between them and the floor price, the larger the order-associated multiplier.
Normalized Liquidity: The smaller a collection’s [normalized] orderbook volume * market capitalization, the larger the collection’s overall multipliers v.v.
Higher risk, higher rewards.
Dynamically adjusting incentives by a user’s associated risk and the collection’s normalized liquidity enables Mintify to transparently produce real-time estimates of XP attribution directly within bid-spread modules, bidding and listing modals, trending tables and collection KPI bars, or anywhere a user may find environmental variables useful for making well-informed decisions.
Bid & Listing Incentives
Starting in SZN4, when you place an order, your XP attribution is dynamically adjusted based on:
Your order’s position within the Orderbook and proximity to the floor price
The time you placed the order relative to other orders at the same price
Bidding (Buy Limits):
The closer your bid is to the current floor price, the higher your multiplier.
The further your bid is to the current floor price, the lower your multiplier.
The lower a collection's liquidity relative to its market capitalization, the larger the multipliers it can attribute to bidders (and vice versa).
Listing (Sell Limits):
The closer your listing is to the current floor price, the higher your multiplier.
The further your listing is to the current floor price, the lower your multiplier.
The lower a collection's liquidity relative to its market capitalization, the larger the multipliers it can attribute to listers (and vice versa).
How to Maximize:
Bid and list closer to the floor price. Multipliers adjust in real-time as a collection's floor price changes.
Bid and list with fewer orders between yours and the floor price. Multipliers adjust in real-time as traders place new orders.
Bid and list collections with lower liquidity relative to their market capitalization. A collection's liquidity environment adjusts in real-time alongside corresponding incentives, promoting capital rotation through amplified multipliers across collections with higher liquidity demand.
Cross-Chain Compatibility
XP 2.0 introduces a completely overhauled system for cross-chain compatibility, using a base XP rate of $100 per 1 XP, $1 per 0.01 XP minimum (USD denominations). To normalize the ‘progression value’ of historical XP with future, USD-denominated XP, all past XP will be normalized based on the Ethereum price at the time of the order.
Direct Purchase Incentives
When you make a direct purchase, you will earn XP based on the converted dollar value of your order.
Tournaments (Tournament XP / Blast XP): Now attribute XP for Direct Purchases at a rate of 1 XP per $10,000 (further influenced by Key Tournament multipliers).
Main Leaderboards (Season / All-Time XP): Now attribute XP for Direct Purchases at a rate of 1 XP per $1,000 (further influenced by Key Main Leaderboard multipliers).
System Components
Mintify’s Risk-Adjusted XP operates on a multifaceted approach, where each individual component adheres to strict requirements based inherently on executable value.
Real-Time Market Data
Organizing raw collection parameters including supply, market (floor) price, market capitalization, and orderbook volume (buy/sell limit orders)
Some real-time datapoints may have lagging metrics deployed to smooth volatile adjustments
Cumulative Orderbook Depth
Quantifying the value of an asset’s available orderbook [buy/sell] liquidity relative to its market cap
Value of Liquidity & Demand
Applying and normalizing raw market data to gauge the value of liquidity, and value of demand for liquidity
Assessing excessive collection liquidity and its extrapolating impact on user risk
Inferred Overhead Limit Value
Implicating aggregate value of [buy/sell] limit orders between a users’ order and the market (floor) price of a collection
Incentive Multiplier Calculation
Determining a users’ [buy/sell limit] incentive multiplier based on the combined influence of above system components
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