🌀Competition Types
Last updated
Last updated
On MatchTrade, there are 3 major competition types:
PnL based competitions
Volume based competitions
Number of Trades based competitions
Note that trades made on either Ethereum or Base count towards your final PnL, Volume or Number of trades, so Ethereum gas is never a hindrance!
PnL based competitions involve measuring the relative profit and loss of competing players/groups.
PnL in a decentralized format is rather hard to measure due to the fact that assets are never really 'bought' or 'sold', but just exchanged between each other. For instance, 'selling' USDC for ETH is simply just acquiring ETH with my USDC. There's no real way for a server or any other tech to tell that your intention was to 'Sell' that USDC and to 'buy' ETH, because swaps are not (truly) peer-to-peer, but rather use liquidity pools that work based on weighted averages of the assets within them.
To this end, we came up with a proprietary formula for calculating your 'nominal' PnL based on the assets you've traded. Each pair you trade has its own PnL, and the average PnL of all your traded pairs is eventually your nominal PnL. Here's how it works.
We take trade details for all your traded pairs. This includes the pair address, pair name, pair rate and the amount of the pair you traded.
Next, we calculate the weighted average of that pair using this formula: , where 'i' represents an individual transaction.
We do this for every pair and then find a general average.
Next, we calculate a 'cumulative percentage change' like this: (Weighted Average Rate Final Rate−Weighted Average Rate ×100)
Finally, your relative PnL is calculated like this: Cumulative Percentage Change × Net Quantity. This yields your relative PnL and we do this on a per-competition basis.
This value is then rounded up to the nearest whole number (to keep comparisons to fixed numbers instead of including decimals, and also to make the UI a lot cleaner). Since we round up the values for everyone, this is very fair.
This method removes the complexities surrounding what a buy or sell is in the DEX context and just relies on the net amounts and rates, removing nuance completely and enabling what we call 'nominal' PnLs to be calculated.
This ultimately means that PnL values are 'nominal' on MatchTrade, and only represent a version of profit and loss based on the trades made during the trading competition's period, and not a general overview of your PnL. In simple terms, don't use this to make big portfolio decisions!
These types of competitions offer a more direct contest for players who don't want skill as a limiting factor to winning. By opting into a volume or number-based competition, you're simply betting that you can either trade a larger volume through MatchTrade than the other player, or you can execute a higher number of trades than the other player. No skill is required!