# Captains Log 20250618.0

## Discourse Read Only Mode

I can't access the billing panel because I am logged out, i submitted a ticket

- Mercury, our banking provider, has changed its banking partner last month, https://support.mercury.com/hc/en-us/articles/31577686813076-Switching-Mercury-partner-banks

> https://www.livemint.com/companies/news/fintech-neobank-mercury-severs-its-relationship-with-evolve-bank-11741811428376.html

This resulted in deactivating all debit cards. The KYC Process for the new bank means I had to submit all the information to them and then get approved, which is still pending. We should have our new account this week.

- [ ] new websites
- [ ] xga.com - calculator for incentives, roadmap, etc
- [ ] Registration for launch to be able to access the auction
- [ ] Leaderboards
- [ ] Weekly changing incentives voting scheme portal
- [ ] xga.fyi - dedicated site for leaderboard and docs, and tutorials
- [ ] leaderboard (not ready)
- [ ] XGA Bidding Bot example
- [ ] XGA SDK in Typescript (go and rust later or will be made bounty)
- [ ] XGA SDK code repo
- [ ] XGA Bidding Bot Example code repo
- [ ]

## XGA Docs Website

Dedicated page: https://xga.fyi
- Vercel has degraded service, https://www.vercel-status.com/ - waiting for this to resolve to deploy latest docs
- LLM Search
- XGA SDK for Builders

## Weekly Allocation Incentives for Future Users (WAIFU)

### XGA Incentives Demand Side

* **Commissions (`C_commission`):** The direct fees charged by the exchange and clearing house per transaction. **This is the primary lever controlled by our fee schedule and rebate programs.**
* **Slippage (`C_slippage`):** The cost incurred from market impact, typically measured by the bid-ask spread. For a small-to-medium-sized participant, this is often estimated as half the spread for each side of a trade. **This is an indirect lever, influenced by the liquidity we attract, particularly through market maker incentives.**

The total round-trip cost for a single unit (e.g., one contract) can be modeled as:

> **`C_roundtrip` = `C_commission` + `C_slippage`**

Where `Slippage` is fundamentally a function of the bid-ask spread:

> **`C_slippage` ≈ ½ × Bid-Ask Spread (for entry) + ½ × Bid-Ask Spread (for exit)**

#### The Standardized Cost Benchmark: Volatility-Adjusted Annual Cost (VAAC)

We must standardize costs. Raw dollar costs are insufficient, as they don't account for a market's inherent volatility or a strategy's trading frequency.

We annualize total costs and normalize them by the market's volatility. We will refer to this metric as the **Volatility-Adjusted Annual Cost (VAAC)**, expressed in basis points (bps).

The calculation follows two steps:

1. **Calculate Total Annualized Cost:** This depends on the `C_roundtrip` and the strategy's **Turnover (`T_v`)**--the number of times a position is traded per year.

> **`Total Annualized Cost` = `C_roundtrip` × Average Position Size × `T_v`**

2. **Normalize by Volatility:** Divide the annualized cost by the market's annualized volatility (`σ_annual`) to get the standardized cost.

> **VAAC (in bps) = (`Total Annualized Cost` / `σ_annual`) × 10,000**

This VAAC metric allows us to benchmark our market's "expensiveness" on an apples-to-apples basis against any other market, from the perspective of a quantitative trader.

#### 5. Application: Designing the Incentives Program Baseline

This framework outlines our methodology for setting fee, rebate, and market maker incentive structures.

> Profile names are non-normative, i.e. placeholder terms.

| **Trader Profile** | **Trading Frequency** | **Key System Parameter** | **Implied Annual Turnover (`T_v`)** |
| :--- | :--- | :--- | :--- |
| **High-Frequency (HF) Trend** | Fast | Short look-back window (e.g., `n=10`) | High |
| **Medium-Frequency (MF) Trend** | Medium | Medium look-back window (e.g., `n=60`) | Medium |
| **Low-Frequency (LF) Position** | Slow | Long look-back window (e.g., `n=250`) | Low |

For each profile, we will calculate the resulting VAAC based on our proposed cost structure.

**Step 3: Tune Incentives Using VAAC as the Guide**

The modeling will reveal whether our proposed structure is competitive.

* **If Calculated VAAC > Target Threshold (13 bps):** Our market is too expensive. We have two levers to pull:

1. **Reduce `C_commission`:** Introduce volume-based commission tiers or targeted rebates for specific participant groups to lower the direct cost.

2. **Reduce `C_slippage`:** Enhance market maker incentives to encourage tighter bid-ask spreads, thereby lowering the indirect cost for all participants.

* **If Calculated VAAC < Target Threshold (30 bps):** Our market is competitively priced. This signals a strong value proposition. For "very cheap" profiles (e.g., VAAC < 50 bps), it indicates that our market can support even higher-frequency strategies.