Case Study: ZAMA/USDC - Weeks 1-2
Zama partnered with Monarch to improve liquidity on the ZAMA/USDC spot market on Hyperliquid. The market had institutional DMMs providing depth, but their spreads were wide, averaging more than 80 bps.
The result: a market with liquidity on the book but almost no trading activity. Volume averaged $3K/day in the week before the campaign.
Liquidity campaign
Marina went live with the following parameters:
| Parameter | Value |
|---|---|
| Market | ZAMA/USDC (Hyperliquid Spot) |
| Duration | 2 weeks |
| Reward heuristics | 50% boosted traded volume, 50% quoted depth, Spread Multiplier |
Week 1 results
| Metric | Week Before | Campaign Week | Change |
|---|---|---|---|
| Total volume | $22,085 | $313,940 | +1,322% |
| Total trades | 287 | 4,261 | +1,385% |
| Avg spread (bps) | 76.7 | 40.4 | -47% |
| Avg depth at 1% | $36,651 | $46,363 | +27% |
| Avg depth at 2% | $175,440 | $191,788 | +9% |
| Total fees generated | $18.16 | $304.17 | +1,575% |
Who the market traded against
The most revealing data point: Marina MMs quoted only ~15% of the book but captured 75% of all fill volume. Their tighter quotes meant traders could actually trade against them.
| Avg Quote volume | Total Fill volume | Fill-to-quote ratio | % of total fills | |
|---|---|---|---|---|
| Marina MMs | $15,221 | $249,140 | 1,637% | 74.8% |
| Institutional DMMs | $174,542 | $84,112 | 48.2% | 25.2% |
The fill-to-quote ratio tells the capital efficiency story: Marina MMs' capital turned over 16x because their quotes were competitive enough to keep getting filled. DMMs had 11x more quote volume but less than half was utilised.
Complementary effect
Institutional DMMs still captured $84K in fill volume and benefited from the increased taker activity that tighter overall spreads attracted to the market. The pie grew for everyone.
- Institutional DMMs provided the depth foundation
- Marina MMs provided tighter, more continuous quoting
- Together, the market went from quiet to genuinely tradeable
Week 2
Based on Week 1 data, Week 2 launched with improved parameters:
- Minimum 2,000 USDC deposit per maker
- More quoting slots at tighter spread tiers
- Spread multiplier introduced to reward tighter quoting exponentially
- Goal: push spreads below 30 bps and improve depth quality
Spread multiplier
To push makers from "wide and large" toward "tight and continuous", we introduced a spread multiplier on the depth half of the reward.
Each hour, a wallet's contributed depth is multiplied by a spread quality score before the depth pool is split:
multiplier = max(0, (100 - avg_spread_bps) / 32) ^ 2For this campaign, C = 100 and D = 32. Future campaigns can tune either parameter around their market goals.
What that means in practice:
| Wallet's avg spread | Multiplier | Effect on Quote Score |
|---|---|---|
| 20 bps | ~6.3x | Heavy reward |
| 40 bps | ~3.5x | Strong reward |
| 60 bps | ~1.6x | Moderate reward |
| 80 bps | ~0.4x | Weak reward |
| 100 bps + | 0 | No Quote Score contribution under this campaign cutoff |
A 40 bps quote contributes nearly 9x more to Quote Score per dollar of depth than an 80 bps quote. Anything at or above the campaign's cutoff contributes nothing to Quote Score.
The mechanism creates a direct economic incentive for makers to compete on price tightness, not just size. Spreads converge downward across the whole cohort, not only at the top of the book.
Week 2 results
| Metric | Week Before | Week 1 | Week 2 | Change vs Week 1 |
|---|---|---|---|---|
| Total volume | $22,085 | $313,940 | $223,000 | -29% |
| Total trades | 287 | 4,261 | 3,389 | -20% |
| Avg spread (bps) | 76.7 | 40.4 | 39.8 | -1% |
| Avg depth at 1% | $36,651 | $46,363 | $54,245 | +17% |
| Avg depth at 2% | $175,440 | $191,788 | $218,638 | +14% |
Volume normalised after the launch spike but market structure deepened. Spreads held below 40 bps and depth grew on both the 1% and 2% bands. Versus pre-campaign, spreads are 48% tighter and depth at 1% is 48% deeper.
Key Takeaway
A 2,500 USDC per week campaign transformed a barely traded market into one averaging about $270K weekly volume across the first two weeks, with spreads about 48% tighter than pre-campaign and depth that continued to deepen after the launch spike.
Marina proved that programmatic incentives can coordinate community liquidity at scale, and that the resulting market structure holds and improves over time.