The Abundance of Exploits with the Aquarius Reward Engine and Re-Engineering it
Aquarius Governance Proposal 24 addresses multiple exploits in the protocol's reward engine. The proposal suggests moving from hourly to daily payouts, upgrading the SDEX reward model to focus on transactional value, implementing dynamic AMM-vs-SDEX ratio distribution, and establishing an Aquarius-backed bribe strategy to incentivize foundational market pairs.
Aquarius is proposing a comprehensive overhaul of its reward engine to address exploits that have disproportionately benefited sophisticated traders. The proposal identifies three key vulnerabilities: a fixed 5:2 AMM-to-SDEX payout ratio, SDEX V2's model that rewards non-productive limit orders equally with executed trades, and hourly payouts that enable rapid gaming strategies. Proposal 24 offers four solutions: shifting to daily payouts synchronized with reward voting, replacing SDEX V2 with V3 that measures unique liquidity (net inflows from executed trades), implementing a dynamic reward ratio that fairly weighs AMM and SDEX contribution, and introducing Aquarius-backed bribes for key market pairs. The proposal includes a phased implementation plan and adjusted bounty structure.
