The Gas Refund Program (GRP) is an initiative spearheaded by the ParaSwap DAO to help with the gas costs ParaSwap users may experience during periods of extensive network traffic. While ParaSwap experimented with similar gas refunds in the past, the Gas Refund Program is the first initiative that assists users and helps make the ParaSwap protocol even more efficient. Let’s look at how the GRP works and how you can participate in the ecosystem!
The first step – Buying and staking your PSP
You must first buy ParaSwap’s governance token PSP to claim gas refunds. To know more about how to buy PSP, visit the following article.
Once you have PSP in your wallet, the first step to becoming eligible for gas refunds is to stake your tokens to assist with the decentralization and efficiency of the protocol. You can read more about Staking PSP and the different staking options here.
After staking your tokens, you will receive a gas refund of up to 95% depending on your ParaBoostScore, which you can read more about its calculation here.
You need a ParaBoostScore of at least 10,000 to receive the minimum refund of 25%. Afterward, the refund amount accrues using the formula: 0.152003ln(0.000517947x) - where ‘x’ is your ParaBoostScore. Here are some examples of refund levels following this formula:
ParaBoost Score | Approximate Refund |
10 000 | 25% (Min Refund Value) |
100 000 | 60% |
500 000 | 85% |
1 000 000 | 95% (max refund value) |
Values might change in the future depending on future governance decisions.
Refund overview – What is eligible, and how and when to claim?
The Gas Refund Program was created to facilitate as many interactions as possible with the ParaSwap ecosystem, which means more than just swaps are refunded! In addition to the usual spot trading, staking PSP is also eligible for gas refunds.
After a few transactions on ParaSwap, you will see an estimate of how much PSP you are eligible to be refunded by clicking on the top right PSP logo at https://app.paraswap.io/.
The gas refund is calculated and distributed proportionally to your stake in each chain at the end of every staking epoch as sePSP1. After the grace period, your incentives become available to claim.
The Gas Refund Program is available on any network where PSP is deployed.
Limits and Abuse Protection
The DAO has decided to allocate a total of $30 million PSP for the Gas Refund Program, to be distributed as sePSP1, with a maximum epoch limit of $500 and an annual limit of $30k per user.
To ensure these limits are not abused, eligible transactions are also constantly assessed for potentially malicious behavior resulting from users not using the Gas Refund Program as intended.
If you think the allocated amount mismatches what you were supposed to have allocated, feel free to contact us through our Contact Us form or the chat at https://app.paraswap.io/.