VRTX Vertical Program Stage 3 – Market Maker Alignment
Vertex’s multi-year vision has evolved considerably, propelled by the growth of Vertex Edge and further reinforced by the improvements in token utility and protocol sustainability introduced by the VRTX Vertical Program.
With each new phase, the Vertical Program reaffirms Vertex’s unwavering commitment to building a dynamic, decentralized trading ecosystem. The program ensures token utility continuously adapts to meet the ever-evolving demands of its participants.
Stage 3 of the program enhances both token utility and long-term sustainability, with a key focus on supporting market makers, who are integral to Vertex’s Hybrid Orderbook-AMM design.
Stage 3: Strengthening Market Maker Alignment
Stage 3 introduces critical updates designed to foster long-term alignment with the protocol. These changes don’t just enhance the market maker experience – they ripple through the entire ecosystem, driving improvements that touch every layer of Vertex’s decentralized exchange and its users.
Before delving into these updates, it’s important to recognize the vital role market makers play in Vertex’s ecosystem. Their contributions are crucial for maintaining liquidity and enabling seamless trading.
In any trading venue, especially decentralized exchanges like Vertex, market makers form the backbone of liquidity. Makers ensure traders can buy and sell assets with minimal slippage, even during periods of high volatility or subdued market activity.
Without a strong base of market makers, liquidity dries up, trades become harder to execute, and prices drift from fair value, leading to inefficiencies across the platform.
Vertex’s Hybrid Orderbook-AMM design delivers low-latency trading seamlessly across multiple chains via Edge. The system operates at its peak when market makers are properly incentivized, as they ensure the liquidity required for efficient trading.
Market makers already earn VRTX rewards for their ongoing contributions. Initially, these rewards were split equally between market makers and takers – those who consume liquidity. In the early days, this balanced approach was essential to building a solid foundation of reliable trading liquidity.
However, as Vertex matures, the need for deeper liquidity and tighter spreads grows. A static incentive model would stifle progress, but dynamic incentives allow the protocol to adapt and scale with evolving market conditions.
In response, Stage 3 recalibrates incentives, tilting the VRTX reward distribution to 75% for market makers and 25% for takers. This adjustment keeps liquidity providers highly engaged, ensuring they remain a driving force behind Vertex’s long-term success.
Enhanced Rebates for Market Makers
Beyond adjusting reward distribution, Vertex is introducing a tiered rebate system to further incentivize liquidity provision. Previously, market makers earned a flat rebate of 0.5 basis points across all markets. While competitive at the time, the changing demands of the protocol called for a fresh approach.
Now, the rebate rate is directly tied to the amount of VRTX staked by market makers. The more they stake, the higher the rebate.
For instance, market makers staking 3 million VRTX or more will earn the maximum rebate of 0.75 basis points – a 50% increase over the previous system.
Those staking 1 million VRTX will receive 0.65 basis points, while market makers with 300,000 VRTX staked will earn 0.55 basis points, reflecting a 10% increase.
The stratified rebate model prioritizes the most committed participants, while still offering meaningful benefits to smaller players.
For example, even makers staking as little as 3,000 VRTX qualify for a 0.15 basis point rebate, ensuring that every contribution is rewarded.
The Stage 3 focus on liquidity has direct benefits for traders, delivering tighter spreads, better pricing, and more efficient order execution.
For example, consider a trader placing a large order on Vertex. In a shallow market, they would likely face significant slippage, causing the actual execution price to deviate sharply from the quoted price. In contrast, in a liquid market with tight spreads, orders are filled more accurately, with minimal slippage, providing a price much closer to the quote.
Improvements in trade execution attract more takers, creating a positive feedback loop that further enhances liquidity on the platform. Better rebate structures keep these vital contributors motivated, ensuring Vertex’s liquidity engine runs smoothly.
A Stronger Vertex Future
Staking VRTX tokens unlocks higher rebate rates for market makers, aligning their interests with the protocol’s long-term growth.
Staking also reduces the circulating supply of tokens and provides stakers with yield rewards – a supplementary revenue stream for participants deeply invested in Vertex’s future.
The relationship between staking rebates and liquidity provision is mutually reinforcing. As market makers stake more VRTX to secure better rebates, they are driven to support the protocol’s growth, ensuring the trading platform remains liquid and efficient.
At the same time, traders benefit from improved market conditions, and the protocol becomes more sustainable. Aligning maker incentives with Vertex’s growth embodies one of DeFi’s core principles: rewarding participants for their sustained contributions, not just their immediate actions.
The broader implications of Stage 3 extend far beyond immediate gains for market makers and traders. By fostering a more attractive environment for liquidity provision, Vertex positions itself as a leading decentralized exchange capable of competing with top-tier platforms in terms of both pricing and liquidity.
Stage 3 of the VRTX Vertical Program marks a major step forward for Vertex. By recalibrating rewards and rebates in line with a dynamic staking model, the program enhances the overall trading experience for all users.
As the Vertex ecosystem continues to evolve, it will only grow stronger, creating lasting value for traders and liquidity providers across multiple chains in DeFi. The journey toward becoming the premier on-chain trading platform continues.
About Vertex
Vertex was founded by a team of seasoned traders and engineers from both traditional finance and DeFi markets. Recognizing the need for more flexible DeFi trading, Vertex launched on Arbitrum and now is proud to play a role in the innovation of a multi-chain DeFi ecosystem.