> ## Documentation Index
> Fetch the complete documentation index at: https://docs.limitless.exchange/llms.txt
> Use this file to discover all available pages before exploring further.

# LP Rewards

> Earn rewards for providing liquidity with limit orders

## Overview

The LP Rewards program incentivizes providing liquidity by rewarding well-placed limit orders. These rewards promote tighter spreads, thicker order books, and a healthy marketplace.

The design iterates on an industry-standard approach used by dYdX and Polymarket, with specifically tuned parameters to ensure competitiveness and fairness.

## Methodology

* Rewards are earned by placing limit orders **within a specific spread from the market midpoint**\*
* The **closer** an order is to the midpoint and the **more competitive** its size, the higher the reward
* To qualify, orders must exceed the **minimum size threshold** set on a per-market basis
* Rewards are calculated **every minute** across all markets and paid out daily at **22:30 UTC**

<Note>
  \*To maintain a fair market-making experience, only limit orders that exceed the minimum shares threshold count toward the midpoint calculation.
</Note>

## Rewards Parameters

Each market has 3 parameters that define how rewards are paid out:

| Parameter      | Example | Description                                    |
| -------------- | ------- | ---------------------------------------------- |
| **Rewards**    | \$200   | Daily USDC rewards available for the market    |
| **Spread**     | 3c      | Maximum distance from midpoint to earn rewards |
| **Min Shares** | 100     | Minimum order size to qualify                  |

These parameters are set to support positive market activity while accounting for each market's uniqueness.

## Bonus Multiplier

Limit orders placed **closer to the midpoint** earn additional rewards through a bonus multiplier. The tighter your spread, the greater your share of rewards.

## One-Sided Liquidity

To promote tail-end speculation, earning from one-sided liquidity is only allowed while the odds are between **5% - 95%**. This provides LPs with greater flexibility in managing their positions while still fostering a robust and efficient market structure.

## Note on Adjustments

These parameters are dynamic and may be adjusted over time to meet the exchange's needs and maintain a thriving marketplace.