Step Finance, a Solana-based DeFi protocol, announced today that it’s launching a new kind of incentive mechanism for its users called Reward Options.
The incentive will be distributed to Step Finance’s 12,000 users via airdrop, the company told CryptoSlate.
Step finance to reward users with options
By introducing the first-ever airdrop of call options, Step Finance has positioned itself as a pioneer not just in the Solana ecosystem, but in the broader crypto market as well.
In a press release shared with CryptoSlate, Step Finance explained that they wanted to reward its 12,000 users but decided to ditch the traditional airdrop model. Existing airdrop models are efficient when it comes to distributing tokens to as many users as possible but often end up hurting the protocol’s community as the majority of those tokens get dumped on the market.
Step Finance’s Reward Options will be the first airdrop of call options in the industry. The incentive mechanism will enable users of Step’s AMM to get the ability to buy STEP tokens at a fixed price.
Reward Options were largely influenced by the recent trend of Protocol Owned Liquidity (PoL), in that productive users of the platform are rewarded with the opportunity to purchase the platform’s tokens. Step Finance aims to create a positive feedback loop with its options and incentivize swappers on the Step AMM. The more swaps the Step AMM sees, the higher the APYs for the LPs become. This further grows the TVL, reduces slippage, and increases the Swap fee volume, all while incentivizing users to use the platform and interact with Solana.
“The Reward Option adds a new layer ecosystem and benefits AMM swappers, STEP token holders, LPs, and the community at large,” George Harrap, the co-founder of Step Finance, told CryptoSlate. “Through this new protocol, STEP is setting the agenda for the future of DeFi – moving away from the airdrop models and into this productive reward model.”
The options are issued every 5 days and have a 5-day expiry. They also have a strike price that’s a specified percentage above the current spot price of STEP—Step Finance believes that this will stabilize the token’s price and solve the farm and dump problem token airdrops experienced in the past.
“In its full effect, the Reward Options will also benefit stakers and LPs as new coins only enter circulating supply in a bull market and in a bear market there is no new coin issuance, reducing the sell pressure experienced by holders,” Harrap explained.