Optimizing Order Size for FMEX Trading-Based Unlock Rewards

Summary

The document explains FMEX's proposed credit-unlocking mechanism, which allocates rewards through two channels: a daily share based on a user's portion of pair-wide volume, and a minute-cycle allocation based on that cycle's volume share. Its analysis focuses on the minute component, modeling reward against order size, total cycle volume, BTC reward value, fees, and expected position-closing loss. It argues that tiny orders earn little while large orders can incur costs that outweigh rewards, implying an order size that maximizes expected net unlocking gain under assumed inputs.

Examples state that with a $100 reward pool and specified fee assumptions, the calculated optimal order and reward vary as cycle volume changes; greater volume is associated with lower returns in the examples. The proposed optimization has an important practical limitation: the cycle's final volume is unknown when an order is placed, and other traders timing orders near the close can disrupt estimates. The text also notes that immediate position closure adds costs. This is a venue-specific reward calculation, not a general trading strategy, and profitability depends on the stated assumptions and realized fees, slippage, and volume.

Key ideas

• FMEX unlock rewards are allocated partly by daily pair volume and partly by minute-cycle volume share.
• The minute-cycle analysis weighs reward share against transaction fees and expected closing losses.
• An intermediate order size can maximize modeled net reward under assumed cycle volume and costs.
• The examples report lower modeled gains as total cycle volume rises.
• Unknown end-of-cycle volume and competing order timing make the proposed optimization uncertain.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.