Risk & Vault
User Liquidity Incentives
Contrarian maker rebates up to −3 bps reward LPs who reduce vault skew.
External users who provide offsetting liquidity directly reduce vault risk. Parabolic rewards this behavior with targeted incentives.
Contrarian maker rebates
When the vault is skewed, users who post orders that would reduce vault inventory earn enhanced rebates:
| Vault Skew | Contrarian Rebate |
|---|---|
| 0–25% | 0 bps (no skew) |
| 25–50% | −1.0 bps (paid to make) |
| 50–75% | −2.0 bps |
| 75–100% | −3.0 bps |
Additional incentives
Inventory Offset Bonus — 0.01%/day on positions that offset vault inventory. Active only when skew >40%. Turns off when balanced.
Priority Settlement — Contrarian LPs get funds distributed first at game end.
Virtuous Cycle — Skew triggers incentives → LPs provide offset → risk decreases → incentives decrease → equilibrium.
Related
- Liquidity & Vault — what creates skew in the first place
- Vault Risk Management — internal layers vs external rebates
- Fees — base maker/taker schedule