Skew Incentive

Lynx traders receive loss rebates through Skew Incentive by opening positions on the underweight side of imbalanced markets.

Skew Incentive is a loss rebate mechanism that rewards traders who help balance market skew. When open interest on one side of a trading pair (longs vs shorts) is larger than the other, the market is "skewed."

How It Works

Traders who open positions on the underweight side help rebalance the market. If these qualifying positions close at a loss, a percentage of that loss is automatically returned to them.

Eligibility Requirements

At position open:

• Position must be on the underweight side

• Position must meet minimum collateral requirements

• Position cannot flip the skew: the opposite side must remain at or above 49.99% after the position is opened

At position close:

• Position must close at a loss

• Feature must remain enabled

Rebate Calculation

The rebate is calculated as: gross P&L × effective rate

Where gross P&L is the P&L from the position's performance calculated from entry to exit price movements (excluding funding/interest payments & all trading fees).

The rebate is applied only to the gross P&L. Trading fees are charged separately and are not included in the rebate calculation.

The rebate is taken from the amount that would normally go to the liquidity pool. Instead of the full loss going to the pool, a portion is returned to the trader.

You never get incentivized for anything past the 50% middle point. If your position pushes the opposite side below 49.99%, you flip the skew and receive no incentive.

If the opposite side drops to 49.99% or lower after your position opens, your entire position is disqualified from any rebate. You didn't balance the market, you just reversed the problem.

Final Example

Market is 70% long / 30% short. Trader opens a short position with $500 collateral, qualifying for the maximum 5% incentive rate since the position doesn't flip.

Position closes with a $200 gross P&L loss:

• Rebate = $200 × 5% = $200 × 0.05 = $10

• Trader receives $10 back

• Net loss: $190 instead of $200

Note: All Trading fees are charged separately and do not affect the rebate calculation.