---
title: Liquidity Mining Program
---

J-Dap Index #: 
Author(s): 
Contributor(s): 
Tag(s): governance-proposal, j-dap, incentive-program
Status: 
Submission Date: 
Approval Date:
Implementation Date:
Forum URL: 
Voting Portal URL:

## Incentive Program Description
This governance proposal enables the first Jet’s Liquidity Mining Program and a Retroactive Governance Reward Program.

### Catalyst
In order for the fixed-term lending markets to function well there needs to be liquidity in the market. Liquidity mining programs have been successfully implemented by various DeFi projects to incentivize users to provide liquidity through the distribution of their governance tokens as rewards.
This will also help to increase the total circulating supply of JET tokens.

### Expectations
Both the Liquidity Mining and Retroactive Governance Rewards proposals aim to increase user traction on Jet Protocol & JetDAO.
To achieve this, these incentive programs offer rewards to users who provide liquidity and participate in governance activities like voting on proposals.
By doing so, more users will be motivated to stake their JET tokens and participate in governance, ultimately increasing the resiliency of the platform's governance participation.
In addition to encourage users to deposit liquidity into Jet, the JET token will also increase its total circulating supply, the utility across DeFi, total distribution, among others.

### Incentive Program Details:
The reward breakdown is:

134,100,946 JET to be distributed to users providing maker liquidity in fixed-term markets.
3,600,000 JET to be distributed retroactively to previous participants in DAO votes on asset listings

All rewards are distributed to users as airdrops, through [Jet’s governance system]([https:/](https://govern.jetassociation.org/#/)/).

## Liquidity Providers Rewards

#### Score based on the following formula:

// Score for each open order
let open_order_score = order_size * ln(order_interest_rate / (abs(mid_market_rate - order_interest_rate) / mid_market_rate))

// Sum all the open order scores for the minute sample
let q_sample = sum(open_order_scores)

// Scale the sampled score for open orders based on the market tenor, biased towards longer tenors
let q_scaled = q_sample * (1 + sqrt(market_tenor_days) / 30)

// Get the final score for a user in the 30-day epoch by summing all the sampled scores during that period

#### Timeline, Funds and Rewards
The JET tokens will be distributed on a 30-day epoch over 4 years. 2,736,754 JET will be distributed per epoch.

The distribution per epoch is allocated to two different provider types:

1,368,377 JET to providers acting as lenders
1,368,377 JET to providers acting as borrowers

## Incentive Program Logic

### Required Action
Token rewards will be distributed to liquidity providers based on a formula intended to reward healthy participation in the fixed-term lending markets.

Only orders within 200 basis points of the mid market rate will be considered for scoring.

Liquidity providers earn rewards based on their relative share of the total user score within the epoch, any user with a score exceeding 1% of the total will receive their reward share.

Once issued at the end of each epoch, rewards must be claimed within 90 days, otherwise unclaimed tokens are returned to the treasury.

### Incentive Success
A successful outcome for this program can be defined as distributing the total $JET tokens to as many holders as possible and attracting the necessary liquidity for the protocol to function properly.

## Implementation

### Communication
After the proposal is approved by governance, a forum post will be published to announce the start date of the incentive program. Additionally, Twitter communications will be sent out to notify the community. The program will officially begin on the first day of the announced start date. After 7 days from the start date, rewards will begin to be distributed to participants.

### Funding Source
Funding for this incentive will be provided by the JetDAO Treasury.

### Technology
The automatic calculations of rewards and automatic rewards payouts will be implemented via the smart contracts used for Jet Fixed Term.
## Incentive Program Operations
### Participation Verification
Verification will be conducted through on-chain data, which is publicly accessible and can be independently verified using on-chain tools
### Reporting
A report of the incentive program will be provided by Jet Core at 3 specific points throughout the life of this incentive program:

- 3 months after the start date of the incentive program.
- 6 months after the start date of the incentive program.
- At the completion of the incentive program.

The reports will be posted to the JetDAO forum.

## Depreciation

### Communication

### Funding

### Technology
The incentive program will automatically conclude at the predetermined date. No further actions are required.

## Incentive Program Tracking