FTX 2022 Quant Trading Competition Official Rules

QUANT TRADING COMPETITION

OFFICIAL RULES

Sponsored by West Realm Shires Services Inc. (“Sponsor”).

NO ENTRY FEE. NO PURCHASE NECESSARY TO ENTER OR WIN. VOID WHERE PROHIBITED.

The Quant Trading Competition (the “Contest”) begins on October 1, 2022 at 1:00 ET and ends on November 30, 2022 at 23:59 ET (the “Contest Period”).



1.              Agreement to Official Rules. By entering or participating in the Contest, you accept and agree to be bound by these “Official Rules.”

Contest Description. The Contest is a skill-based contest in which participating teams compete against each other by demonstrating their ability to use mathematical models and large datasets to analyze financial markets by trading real funds provided by Sponsor on the FTX.US platform available at https://ftx.us/ (the “Platform”) to earn points. 

 

2.              Eligibility. The Contest is open to legal residents of the U.S. (a) eighteen (18) or older, as of the date of entry, (b) who have an active e-mail account and Internet access, (c) who are a recognized or registered member in good standing of a Qualified Club, or a student in good standing of an Eligible University who is sponsored by a Qualified Club, and (d) who have an account on the Platform and have completed and passed Know Your Client (KYC) Level 2 verification (as determined by Sponsor in its sole discretion) as of September 24, 2022 at 23:59 ET. A “Qualified Club” is a quant finance, blockchain, or related organization at one of the Eligible Universities that has an account established by FTX on the Platform (an “Account”) as of September 30, 2022 at 23:59 ET. To establish an Account, Qualified Club members will have to complete the following verification steps: (i) have two (2) of its officers and/or leaders complete and pass Know Your Client (KYC) Level 2 verification; (ii) provide its minutes and current member list; and (iii) provide a written confirmation from its affiliated Eligible University that it is in good standing. The Sponsor may in its sole discretion update the minimum KYC requirements to participate in the Contest at any time as reasonably necessary to comply with its internal compliance obligations or otherwise comply with applicable law. 

The “Eligible Universities” are:

·       Carnegie Mellon University;

·       University of Chicago;

·       Georgia Institute of Technology;

·       Harvard University;

·       Massachusetts Institute of Technology;

·       University of Michigan;

·       Michigan State University;

·       University of Minnesota;

·       The Ohio State University;

·       University of Pennsylvania;

·       University of Southern California;

·       The University of Texas at Austin;

·       Princeton University; and

·       University of California, Berkeley.

 

Employees of Sponsor and its parent company, affiliates, subsidiaries, advertising, promotion, fulfillment or other coordinating agencies, individuals providing services to Sponsor through an outsourcer or temporary employment agency during the Contest Period, and their respective immediate family members and persons living in their same household, are not eligible to participate in the Contest.

 

3.              How to Enter. You may enter the Contest as follows:

(a)            Registration. Before September 24, 2022 at 23:59 ET, visit the Contest registration page located at https://airtable.com/shrUVufFFmpKnIIUh (the “Contest Website”) and follow the instructions on the Contest Website to register for the Contest.

Forming Teams. Before the start of the Contest Period, Sponsor will, in its sole discretion, allocate a number of teams (each, a “Team”) to each Qualified Club based, in part, on the number of eligible individuals from such Qualified Club who have registered for the Contest pursuant 4(a). There will be a maximum of one hundred (100) Teams allocated for the Contest. Once a Qualified Club is allocated a number of Teams, such Qualified Club is responsible for assigning its eligible members who have registered for the Contest pursuant 4(a) to a Team. There is no limit to the number of qualified, registered individuals on a Team. Registered individuals must be part of a Team to participate in the Contest and may only join one (1) Team.

(b)            Team Subaccount Creation. Before September 30, 2022 at 12:00 ET, each Team must follow the instructions posted at https://help.ftx.us/hc/en-us/articles/360043580073-Subaccount to create the Team’s subaccount on the Platform (each, a “Subaccount”) under its Qualified Club’s Account.  Once a Subaccount is created, the Team must generate a unique login for each of its individual Team members to access the Subaccount by following the instructions posted at https://help.ftx.us/hc/en-us/articles/1500005998282-Custom-Logins-and-Organization-Permissioned-Logins. By accessing or using the Platform and participating in the Contest, each individual Team member must agree to the FTX.US User Agreement located at https://ftx.us/TermsOfService.pdf.

Funding. Sponsor has committed to contributing three hundred thousand United States dollars ($300,000 USD) for participants to use for trading during the Contest Period (“Sponsor Contributions”). Such Sponsor Contributions will be allocated equally across all Teams (each, an “Initial Allocation”) on September 30, 2022.  At minimum, each Team’s Initial Allocation will be three thousand United States dollars ($3,000 USD). Team members will be able to trade using their Subaccount, which aggregates trading activity at the member level for purposes of viewing, coordinating, calculating, and as otherwise necessary to conduct the Contest. Participants will be unable withdraw any Sponsor Contributions from their accounts, and following the conclusion of the Contest, acknowledges and agrees that Sponsor will collect a reimbursement in the amount that equals the lesser of their Qualified Club’s: (i) final aggregate balance of all of its Teams’ Subaccounts; and (ii) aggregate Initial Allocation.

(c)            Inventory and Price Risk. On September 30, 2022, each Team may purchase its desired inventory on the Platform using its Initial Allocation (the “Inventory Purchase”). When earning and calculating points as described in Sections 5 and 6, the Inventory Purchase is marked to the average fill price, net of any fees paid. By way of example, if a Team has an Initial Allocation of $3,000 USD, and wants to hold 50% inventory in USD and 50% in SOL, such Team may buy $1500 USD worth of SOL on September 30, 2022. Assuming that this allows the Team to purchase 50 SOL, Sponsor will mark the price of the Inventory Purchase to $30 SOLUSD for purposes of earning and calculating points and Net Profits as described in Sections 5, 6, and 7. Further, if:

  • The Team runs its strategy during the Contest, and its Subaccount now reflects 55 SOL and $1500 USD, but the price of SOL has instead decreased to $20 USD, the Inventory Purchase of 50 SOL is still marked back to the original $30 SOLUSD, leaving the value of the Inventory Purchase at $1500 USD. However, each of the 5 SOL surplus is now valued at $20 USD, leaving the Team with (5 SOL x $20) = $100 USD in profits.

 

  • If the Team runs its strategy during the Contest, and its Subaccount now reflects 45 SOL and $1500 USD, but the price of SOL has doubled to $60 USD, the Inventory Purchase is still marked back to the original $30 SOLUSD, leaving the value of the remaining Inventory Purchase at (45 SOL x $30) = $1350 USD, total Subaccount balance reflecting $2850 USD, and loss reflecting $150 USD.

 

(d)            Strategy. Before a Team is eligible to execute trades during the Contest Period, a Team must submit to Sponsor a high-level description (a paragraph or less) of the strategy the Team intends to run at https://airtable.com/shr8PUb5A6xjbnYrR. Teams may use historical FTX.US data before and during the Contest Period available for download at https://docs.tardis.dev/historical-data-details/ftx-us, and separate terms and conditions of use may apply (see https://docs.tardis.dev/legal/terms-of-service). 

Trade. Subject to Section 4(f), each Team may execute trades using its Initial Allocation on the Platform during the Contest Period to earn points as described in Section 5 below. All trades are subject to the following terms:

(i)             Fees:  Trades are subject to 5 bps (0.05%) taker fees and 0 bps (0.00%) maker fees; and

Rate Limits:  Each Qualified Club will have rate limits corresponding to the MM5 tier offered on the Platform available at https://help.ftx.com/hc/en-us/articles/360052595091-Ratelimits-on-FTX. Note that because these rate limits are enforced at the Qualified Club’s Account level, and not at a Team’s Subaccount level, all Teams associated with a Qualified Club collectively contribute to such Qualified Club’s rate limits.

(ii)            Jurisdiction Limits: Participants may not access or use the Platform in New York.

DISCLOSURE: PARTICIPATING INDIVIDUALS, TEAMS, AND QUALIFIED CLUBS MAY NOT ENGAGE IN TRADING ACTIVITY ON BEHALF OF ANY THIRD PARTY. SPONSOR RESERVES THE RIGHT TO DISQUALIFY ANY PARTICIPATING INDIVIDUAL, TEAM, OR QUALIFIED CLUB, IN ITS SOLE DISCRETION, IF SPONSOR FINDS EVIDENCE OR HAS CAUSE TO SUSPECT THE PARTICIPATING INDIVIDUAL, TEAM, OR QUALIFIED CLUB HAS ENGAGED IN TRADING ACTIVITY ON BEHALF OF A THIRD PARTY. 

 

4.              How to Earn Points. During the Contest Period, Teams earn points based on Primary Metrics, Bounties, and the ROI Multiplier as described below. All Primary Metrics and profits will be calculated according to USD notional.

(a)            Primary Metrics. All Teams will be ranked, from highest to lowest, for each of the following six (6) metrics based on a Team’s highest performing ten (10) days for each metric during the Contest Period: BTC/USD Volume Traded, ETH/USD Volume Traded, SOL/USD Volume Traded, All Other Pairs Volume Traded, Most Profitable (expressed as % daily return), and Highest Volume Traded on All Profitable Days (the “Primary Metrics”). The ten (10) Teams ranking the highest in each Primary Metric will receive the points indicated in the chart below. 

Primary Metric Rank
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
BTC/USD Volume Traded 10 points 9 points 8 points 7 points 6 points 5 points 4 points 3 points 2 points 1 point
ETH/USD Volume Traded 10 points 9 points 8 points 7 points 6 points 5 points 4 points 3 points 2 points 1 point
SOL/USD Volume Traded 10 points 9 points 8 points 7 points 6 points 5 points 4 points 3 points 2 points 1 point
All Other Pairs Volume Traded 10 points 9 points 8 points 7 points 6 points 5 points 4 points 3 points 2 points 1 point
Most Profitable (expressed as % daily return) 10 points 9 points 8 points 7 points 6 points 5 points 4 points 3 points 2 points 1 point
Highest Volume Traded on All Profitable Days 10 points 9 points 8 points 7 points 6 points 5 points 4 points 3 points 2 points 1 point

 

(b)            Bounties. Each Team will earn points for performing certain actions, as indicated in the chart below (each, a “Bounty”).

Bounty
2 points per $250,000 USD traded
Each day, 2 points to Team trading the highest volume traded and was profitable for the day.
Each day, 2 points to Team with the highest profits for the day.
1 point per profitable day

 

(c)            ROI Multiplier. Each Team will earn points based on its Subaccount balance at the conclusion of the Contest Period equal to: ((the Team’s final Subaccount balance in USD/the Team’s stating Subaccount balance in USD)^2) x the points their team earned (the “ROI Multiplier”). By way of example, if a Team began the competition with $1000 in USD and its ending balance is $900, its ROI Multiplier equals (($900/$1000)^2) = .81. If the team earned 10 points throughout the competition, then their final total will be 10 x .81 = 8.1 points.

 

5.              Determination of the Winner. The five (5) Teams that earn the most points at the conclusion of the Contest Period will be the winning Teams of the Contest, and will receive the prizes in accordance with the schedule in Section 7(a). Without limiting any other terms of these Official Rules, Sponsor reserves the right to disqualify any participant, in its sole discretion, if Sponsor finds evidence or has cause to suspect the participant received an unfair advantage over other participants. Score accrual will be tracked by Sponsor’s internal clocks and systems. The decisions of Sponsor (including but not limited to any calculation or computation by Sponsor’s systems or the results thereof) will be final. If any ties must be broken to determine the winners, the winner will be the Team with the greatest balance in USD in its Subaccount at the end of the Contest Period. If Teams tie, and have equal balances reflected in their Subaccounts, the applicable prize(s) will be split equally between such Teams. By way of example: (a) if two Teams tie for first place and have the same balance in USD reflected in their Subaccounts, the two Teams will equally split the combined First Place Prize and Second Place Prize; and (b) if two Teams tie for fifth place and have the same balance in USD reflected in their Subaccounts, the two Teams will equally split the Fifth Place Prize.

Prizes and Odds. The prizes to be awarded from the Contest are as follows:

(a)            The winning Teams will be awarded the prizes (each, a “Team Prize”) as follows:

(i)             One (1) First Place Prize awarded to the Team who places first (1st) for highest number of points earned: cash prize of fifteen thousand United States Dollars ($15,000 USD).

One (1) Second Place Prize awarded to the Team who places second (2nd) for highest number of points earned: cash prize of seven thousand and five hundred United States Dollars ($7,500 USD).

(ii)            One (1) Third Place Prize awarded to the Team who places third (3rd) for highest number of points earned: cash prize of five thousand United States Dollars ($5,000 USD).

One (1) Fourth Place Prize awarded to the Team who places fourth (4th) for highest number of points earned: cash prize of one thousand and five hundred United States Dollars ($1,500 USD).

(iii)           One (1) Fifth Place Prize awarded to the Team who places fifth (5th) for highest number of points earned: cash prize of one thousand United States Dollars ($1,000 USD).

(b)            Each Qualified Club will be awarded cash prizes in the amount of Net Profits generated by all of its competing Teams during the Contest Period (each, a “Club Prize”). “Net Profits” are defined as the greater of:

(i)             Total balance of the Qualified Club’s Account in USD (comprising of its Teams’ Subaccounts) at the conclusion of the Contest Period minus the total value of Initial Allocation received by all of the Qualified Club’s Teams prior to the Contest Period; and

$0 USD.   

Total approximate retail value of all prizes to be awarded depends on each Teams’ performance in the Contest. At minimum, total ARV $30,000 USD.

DISCLOSURE: THE VALUE OF CRYPTOCURRENCY IS SUBJECT TO CHANGE. THERE CAN BE A SUBSTANTIAL RISK THAT IT COULD LOSE VALUE (POSSIBLY ALL VALUE). 

The odds of winning a prize depend on the total number of eligible Teams and the skill of the participants. No cash or other substitution of prizes is permitted, except at the sole option of Sponsor for a prize of equal or greater value. Sponsor will not replace any lost or stolen prizes. Winners are solely responsible for any and all federal, state, provincial and local taxes, if any, that apply to prizes.

 

6.              Prize Distributions. Following the Contest Period, Sponsor will distribute prizes as follows:

(a)            Team Prize. Sponsor will divide each Team Prize equally among all of a Team’s individual members, and deposit such winnings to each of the Team member’s individual account on the Platform.

(b)            Club Prize.

(i)             Sponsor will be reimbursed in accordance with Section 4(d);

The Net Profits balance will be aggregated by the Sponsor based on the activity represented at the Account and each Subaccount, as applicable; and

(ii)            The Qualified Club will be able to determine one of three methods of Club Prize distribution:

(1)            Sponsor will divide each Club Prize equally among all of a Qualified Club’s individual members who participated in the Contest, and transfer such winnings to each of the Qualified Club member’s individual account on the Platform;

Sponsor will divide each Club Prize based on calculating the relative profit/losses generated by each Team and distribute the Club Prize on a pro rata basis per Team equally among the Team participants who participated in the Contest, and transfer such winnings to each of the Qualified Club member’s individual account on the Platform; or

(2)            Alternatively, the Sponsor in its sole discretion may allow the Qualified Club to determine its own Club Prize distribution method. To do so, the Qualified Club must contact the Sponsor at qfc@ftx.us and request a prize distribution allocation that is different from the above options. Sponsor will request additional information if a Qualified Club pursues this option. Sponsor makes no representation or guarantee that it will grant such request and may deny such request for any reason.

Sponsor may in its sole discretion require additional documentation from each participating individual prior to distributing the prizes.

 

7.              Notification of Winners. The winning Team will be notified within a reasonable period of time after the conclusion of the Contest Period. Members of the winning Team and each Qualified Club may be required to sign and return an affidavit of eligibility and publicity/liability release. If the selected winning Team and each Qualified Club cannot be contacted, is ineligible, fails to claim a prize, fails to complete any required affidavit of eligibility or publicity/liability release within the days specified in the notification or thirty (30) days after such notification, whichever comes first, and/or fails to comply with any of the requirements, the prize may be forfeited and an alternate potential winning Team may be selected from remaining eligible Teams who have participated in the Contest.

Disclaimers.

(a)            Sponsor is not responsible for (i) late, lost, delayed, damaged, incomplete, illegible, misdirected or undeliverable entries, responses, or other correspondence, whether by email or otherwise; (ii) theft, destruction, unauthorized access to or alterations of entry materials; or (iii) phone, electrical, network, computer, hardware, software program or transmission malfunctions, failures or difficulties.

IN NO EVENT WILL SPONSOR BE LIABLE TO YOU, ANY PARTICIPATING TEAM, OR ANY QUALIFIED CLUB FOR ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF USE, DATA, BUSINESS OR PROFITS) ARISING OUT OF OR IN CONNECTION WITH PARTICIPATION IN THE CONTEST, WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, AND WHETHER OR NOT SPONSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SPONSOR’S AGGREGATE LIABILITY TO YOU, ANY PARTICIPATING TEAM OR ANY QUALIFIED CLUB ARISING WITH RESPECT TO THESE OFFICIAL RULES WILL NOT EXCEED $100.  Some jurisdictions do not allow the limitation or exclusion of liability for incidental or consequential damages, so the above limitation or exclusion may not apply to you.

 

8.              Indemnification. You agree to indemnify, defend and hold Sponsor and its parent, affiliates, subsidiaries, directors, officers, employees, sponsors and agents, including advertising and promotion agencies, and assigns, and any other organizations related to the Contest, harmless, from any and all claims, injuries, damages, expenses or losses to person or property and/or liabilities of any nature that in any way arise from participation in this Contest or acceptance or use of a prize or parts thereof, including without limitation any injuries, losses, or damages (compensatory, direct, incidental, consequential or otherwise) of any kind arising in connection with or as a result of the prize, or acceptance, possession, or use of the prize, or from participation in the Contest.

Publicity. Except where prohibited, by participating in the Contest, you consent to the use of your name, photo and/or likeness, biographical information, and statements attributed to you as an entrant (if true) for advertising and promotional purposes, including without limitation, inclusion in Sponsor’s newsletters and Sponsor’s website at https://ftx.us/, without additional compensation.

 

9.              Additional Conditions. Sponsor reserves the right, in its sole discretion, to terminate, modify or suspend the Contest in whole or in part, if in Sponsor’s opinion (a) the Contest is not capable of running as planned by reason of the occurrence of any event beyond its control including, but not limited to, fire, flood, epidemic, pandemic, earthquake, explosion, labor dispute or strike, act of God or public enemy, communications, equipment failure, utility or service interruptions, riot or civil disturbance, terrorist threat or activity, war (declared or undeclared), interference with the Contest by any party, or any federal, state, local or provincial government law, order, or regulation, order of any court or jurisdiction, or other cause not reasonably within Sponsors’ control, or (b) any other factors beyond Sponsor’s reasonable control corrupt or affect the administration, security, fairness, integrity, or proper conduct of the Contest, in all instances without liability to the entrants. Sponsor also reserves the right to disqualify any entrant or winner, as determined by Sponsor, in its sole discretion.

Governing Law and Choice of Forum. These Official Rules and any action related thereto will be governed by the Federal Arbitration Act, federal arbitration law, and the laws of the State of California without regard to its conflict of laws provisions. Except as otherwise expressly set forth in Section 15 (Dispute Resolution), the exclusive jurisdiction for all Disputes (defined below) that the parties are not required to arbitrate will be the state and federal courts located in Alameda County in California, and each party waives any objection to jurisdiction and venue in such courts.

 

10.           Dispute Resolution.

  • Mandatory Arbitration of Disputes. Any dispute, claim or controversy arising out of or relating to these Official Rules, the Contest, or the prizes (collectively, “Disputes”) will be resolved solely by binding, individual arbitration and not in a class, representative or consolidated action or proceeding. The U.S. Federal Arbitration Act governs the interpretation and enforcement of these Official Rule, and each party waives the right to a trial by jury or to participate in a class action.
  • Exceptions. As limited exceptions to Section 15(a) above: (i) each party may seek to resolve a Dispute in small claims court if it qualifies; and (ii) each party retains the right to seek injunctive or other equitable relief from a court to prevent (or enjoin) the infringement or misappropriation of each party’s intellectual property rights.
  • Conducting Arbitration and Arbitration Rules. The arbitration will be conducted by the American Arbitration Association (“AAA”) under its Consumer Arbitration Rules (the “AAA Rules”) then in effect, except as modified by these Official Rules. The AAA Rules are available at www.adr.org or by calling 1-800-778-7879. A party who wishes to start arbitration must submit a written Demand for Arbitration to AAA and give notice to the other party as specified in the AAA Rules. The AAA provides a form Demand for Arbitration at www.adr.org. Any arbitration hearings will take place in the county, city (or parish) where you, a participating Team, or a Qualified Club are located, unless we both agree to a different location. The parties agree that the arbitrator shall have exclusive authority to decide all issues relating to the interpretation, applicability, enforceability and scope of this arbitration agreement. To the extent the location of the arbitration hearing is more than 100 miles from a location of Sponsor’s offices, Sponsor reserves the right to appear by video conference to the fullest extent permitted by law.
  • Arbitration Costs. Payment of all filing, administration and arbitrator fees will be governed by the AAA Rules, and Sponsor won’t seek to recover the administration and arbitrator fees we are responsible for paying, unless the arbitrator finds your, a participating Team’s, or a Qualified Club’s Dispute frivolous. If Sponsor prevails in arbitration Sponsor will pay all of its attorneys’ fees and costs and won’t seek to recover them from you, a participating Team, or a Qualified Club. If you, a participating Team, or a Qualified Club prevail in arbitration, you, a participating Team, or a Qualified Club will be entitled to an award of attorneys’ fees and expenses to the extent provided under applicable law.
  • Injunctive and Declaratory Relief. Except as provided in Section 15(b) above, the arbitrator shall determine all issues of liability on the merits of any claim asserted by either party and may award declaratory or injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party’s individual claim. To the extent that a party prevails on a claim and seeks public injunctive relief (that is, injunctive relief that has the primary purpose and effect of prohibiting unlawful acts that threaten future injury to the public), the entitlement to and extent of such relief must be litigated in a civil court of competent jurisdiction and not in arbitration. The parties agree that litigation of any issues of public injunctive relief shall be stayed pending the outcome of the merits of any individual claims in arbitration.
  • Class Action Waiver. THE PARTIES AGREES THAT EACH PARTY MAY BRING CLAIMS AGAINST THE OTHER ONLY IN ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, if the parties’ dispute is resolved through arbitration, the arbitrator may not consolidate another person's claims with your, a participating Team’s, or a Qualified Club’s claims, and may not otherwise preside over any form of a representative or class proceeding. If this specific provision is found to be unenforceable, then the entirety of this Dispute Resolution section shall be null and void.
  • Severability. With the exception of any of the provisions in Section 15(f) of these Official Rules (Class Action Waiver), if an arbitrator or court of competent jurisdiction decides that any part of these Official Rules is invalid or unenforceable, the other parts of these Official Rules will still apply.

11.           Personal Information. Sponsor may collect personal data about participants online, which will be used for administering and promoting the Contest and other related business purposes (including sharing your information with third parties), and in accordance with Sponsor’s privacy policy at https://ftx.us/legal/legal-policies. 

Winner’s List, Official Rules. For a list of winners, send an email message to qfc@ftx.us with “Winner’s List” as the email subject and the Contest name specified in the body of the email. Requests must be received within four (4) weeks of the end of the Contest Period.

12.           Sponsor’s Address: West Realm Shires Services Inc., 167 N. Green St, Suite 1102, Chicago, IL 60607.