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Simulation Framework

Drift has built an open-sourced simulation framework of its protocol design and is launching a research report competition where participants can earn over USD$50,000 by running simulations, sharing findings, and building solutions to improve the robustness of Drift v2.

This simulation framework provides a sandbox environment for Drift’s on-chain exchange and allows developers to add or adjust parameters in an effort to optimise strategies (with dynamic spreads, fees, and re-pegging) that will manage the Dynamic AMM and its net position as a market maker. The framework also allows developers to backtest with data collected from Drift v1 to test for long/short imbalance, fees collected, slippage, and security.

Competition

The competition will take place for a month beginning on June 17, 2022 and ending on July 17, 2022.

The goal of each repository submission is to create a strategy that can manage the parameters of the DAMM on auto-pilot via strategies like setting dynamic spreads (based on market volatility, bid/ask pressure) and methods to re-peg the DAMM.

Participants can use the simulation framework to suggest, test, and iterate DAMM management strategies and design changes that will improve the protocol’s liquidity and solvency. Submissions will then be holistically judged on how well the following parameters are addressed. Please provide graphs where relevant of the below terminal outcomes: 

  1. Lower average market slippage
  2. Reduced long-short imbalances
  3. Higher terminal fees (minus usage of fees)
  4. Any new design changes including your justification for those changes

The simulation framework is written in Python and open sourced on GitHub.

For detailed instructions on how to get started on your submission, please visit our guide with examples here

In the spirit of openness, we encourage the community to test their own designs, explore Drift’s planned features for v2, and share insights with the wider community.

Submission Requirements

Research Report Competition

For eligibility, submissions must meet the following requirements:

1. Include a forked github repository from https://github.com/drift-labs/drift-sim

  • the repository should incorporate any changes that will assist you in your research findings and report

2. Submit a research report outlining:

  • changes made to the protocol, together with detailed justification for those changes
  • any proposed features
  • any new strategies

3. Include a tweet (or tweet thread) which links the report

4. Submit via this link: https://form.typeform.com/to/oE7e5U15, before the deadline on July 17, 2022 at 23:59 EST

For further details regarding submissions, please refer to the Drift Research Report Competition Rules.

Prizes

The Research Report Competition prizes will be split among three winners:

  • 1st place:  $2,500
  • 2nd place: $1,500
  • 3rd place:  $1,000

In addition, we have an ongoing discretionary research bounty of up to $50,000. Please contact a team member via Discord if you would like to propose a research project or a potential implementation for a v2 feature.

Resources

Good luck everyone, and happy Drifting! 👾

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