⚠️ Confidential, do not share! ⚠️

This document is a work-in-progress. Please reach out if you have any comments or concerns!

Table of Contents

1. Pilot Program Overview
2. Background Info
3. Timeline and Steps To Participate
4. Operating a Router
5. Economics
6. FAQ

Pilot Program Overview

The Router Pilot Program is a 3-6 month program where routers will be able to earn token rewards for participating and providing liquidity on mainnet.

Details:

• Duration: We will run the pilot program until token launch (Q1/2 2021).
• Participants: While our goal is to make Connext a fully permissionless system as soon as possible, for security and stability reasons we must restrict the initial participants to only those who are very experienced with running infrastructure for other networks and who are economically/philosophically aligned with the network. For this reason, we have hand-selected early participants from our community and spoken with you all directly.
• Target Program Size: We will be running this program in phases. The first phase will target 20-25 routers with up to $25m in liquidity. Subsequent phases will scale up routers/liquidity based on demand in the network and router onboarding speed.
• Token Incentive Structure: We will be allocating 1-2% of the total network supply to the program. Routers participating will earn more or less tokens based on a combination of liquidity provided and duration live on mainnet with the liquidity (earlier phases will earn a higher tier of rewards). We are still working on the exact incentive structure, but are targeting a model where routers will earn the best ratio of capital provided to tokens earned (i.e. token APY on liquidity) if they supply around $1m of liquidity.
• Routing Returns: Routers will additionally be able to keep whatever returns they make from network fees. For a more detailed discussion of router returns, see Economics below.
• Preferred Assets: For the duration of the program, we will only be giving token rewards for liquidity provided in the following assets: USDC, USDT, DAI, wETH/ETH, wBTC. Routers may of course supply liquidity in other assets if they wish.
• Preferred Chains: We will have no restrictions on the chains on which liquidity must be supplied. To optimize fee revenue, we suggest that routers try to find chain and asset pairs which are commonly used but are not yet highly liquid. See Economics for a longer discussion on this.