Vertex Protocol: Driving Trading Volume through a Referral Program

‍

What is Vertex Protocol?

Vertex is a cross-margined decentralized exchange (DEX) protocol offering spot, perpetuals, and an integrated money market bundled into one vertically integrated application on Arbitrum.

‍

The Challenge

In June 2024, Vertex found itself at a crossroads with its referral program. Despite having a basic structure, the protocol required improvements to boost its growth and efficiency. Vertex needed a solution that would enable offering more competitive incentives, optimize the management of referrals and rewards, and provide accurate data to assess the program's impact. The implementation of advanced technology was seen as an essential step to achieve these goals and ensure sustainable and efficient protocol growth.

‍

The Solution

‍

‍

Vertex has partnered with Fuul to launch an enhanced Referral Program, introducing a more competitive and attractive incentive structure for participants. This new program includes three key updates: significantly higher rewards, the introduction of a three-tier commission system based on referred volume thresholds, and an attractive 10% rebate on taker trades for referees.

The Vertex team has implemented the Fuul SDK to accurately track referrals from each participant, manage automatic payout of earnings, and ensure resistance to Sybil, preventing system abuse. Additionally, the program features a leaderboard displaying total transaction volume and rankings of all participants.

Fuul's flexibility in updating the program allowed Vertex to adapt swiftly, ensuring the new referral program remains relevant and more attractive.

‍

Implementation

Based on the Revenue Sharing model, this program allows participants to earn $USDC tokens by referring new users who perform taker trades on the platform. A percentage of the fees generated by each trade is allocated to reward payments, clearly incentivizing referrals and promoting activity on the platform in a transparent manner.

Referral Program Structure:

The new Vertex referral program is organized into three commission tiers, allowing referrers to earn more as the trading volume of their referees increases. Using a 60-day rolling average, commissions are calculated based on the total taker volume traded by referees. These commissions are defined as a percentage of the total fees paid by referees on taker trades.

The taker volume thresholds and corresponding commission tiers are as follows:

• Tier 1: Referee taker volume < $5M, Referee taker fee percentage: 20%
• Tier 2: Referee taker volume between $5M and $25M, Referee taker fee percentage: 25%
• Tier 3: Referee taker volume > $25M, Referee taker fee percentage: 30%

Additionally, referred users can claim 10% of all fees paid, receiving it as a rebate in $USDC directly to their wallet connected to Vertex.

Vertex Protocol’s entire incentives hub was built using Fuul’s APIs and SDKs in a fully white-label setup, tailored to meet their brand and user experience needs seamlessly. This flexibility allowed Vertex to deliver a customized and integrated experience, maximizing the program’s impact and strengthening brand identity without technical hurdles.

Results

During the first month of the new referral program’s operation, the platform experienced a significant increase in new user participation and trading volume. Notably, 30% of Vertex’s total volume came from trades generated by referred users. This direct impact significantly boosted the platform’s fees and revenue, reaching $1.4M in fees and $1.2M in revenue, representing a 45% increase compared to the previous month. The enhanced incentive structure and daily payouts motivated users to refer more, creating a snowball effect that benefited both referrers and Vertex.

Sybil Defender in action: With Fuul's advanced Sybil Defender tools, Vertex Protocol successfully blocked over $200K in Sybil attacks within their program. This automated protection not only safeguarded the integrity of their incentive program but also guaranteed rewards reached genuine users, creating a secure and trusted environment for all participants.

The program's success led the Vertex team to explore new ways to incentivize users, including staking their $VRTX token. Reward tiers were established for affiliates based on token staking, creating a cycle where, to earn higher referral trading profits, users had to commit capital to staking. Thanks to Fuul's audience features, they were able to implement this easily, thereby strengthening Vertex's financial position.

‍

"We switched from our in-house solution to Fuul because it enables us to tweak incentives and move fast without going through our dev team every single time." Brian from Vertex

‍

Conclusion

The success of Vertex Protocol underscores Fuul's effectiveness in enhancing its referral program to increase user engagement through well-designed incentives. By implementing attractive rewards and a daily payment structure, Vertex not only significantly increased the number of new users but also fostered higher trading volumes on its platform. This strategic approach has proven to be a powerful tool for driving platform growth and adoption, resulting in a notable increase in fees and revenue generated.