GMX as the most successful Dapp on Arbitrum so far, including a few projects building on top it, have contributed to the thriving of the whole Arbitrum ecosystem.
Solv Protocol’s first DEFI delta neutral yield strategy also have chosen GMX as the underlying asset and we’re progressively looking into opportunities to create more strategies on GMX V2.
We value GMX as a fundamental DEFI infrastructure in Arbitrum ecosystem so Solv team supports the goal GMX is trying to achieve here and we believe with that we can keep building to ensure the leading position of Arbitrum as the best layer 2 protocol.
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thanks for your comments
i would encourage you to consider more intensely that a portion of the ARB being requested by GMX would be effectively issued to other builders, which makes the GMX proposal a more efficient ask than other protocols whose asks are related to the respective protocol in question
with that in mind, do you still share the same concerns? i think much of the handwringing of the size GMX is asking for is ignoring that much of GMX’s growth was based on the encouragement of open-ended and mutually-beneficial collaborations. GMX isn’t just Arbitrum because the quanta of some data (TVL, daily users, fees, OI, etc) although they certainly help the argument. ppl recognize “GMX is Arbitrum” because it has played a foundational role in developing other sectors of Arbitrum DeFi outside of perps. it seems counterintuitive to suggest GMX should be hamstrung when it has played such a nurturing role in the ecosystem
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hi there, and thanks for your thoughts
have you seen better uses of ARB from other grant proposals, and if so, what are some of the stand out examples? perhaps there is something to be learned for GMX
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Having integrated with GMX, we’ve witnessed first-hand the immense value and foundation they bring to the table. We believe that the grant request by GMX isn’t just for their growth but also a representation of the support and bolstering of the broader ecosystem.
GMX isn’t just another protocol; it’s a pillar for Arbitrum, serving as a base layer on which many have built and expanded. This isn’t just about financials; it’s about the vision for a decentralized future, a future where protocols like GMX pave the way for others to follow.
Several comments here have rightly highlighted GMX’s instrumental role in shaping Arbitrum’s narrative. They’ve been bringing forth both innovation and stability. Their foresight, dedication, and commitment have enabled many of us to thrive and contribute positively to the ecosystem.
We genuinely believe that to sustain and amplify this trajectory of growth and innovation, these grants are not just justified but essential. Allocating them to GMX would be an investment into the very heart of Arbitrum, ensuring that both current and future projects have a robust, innovative, and supportive platform to operate on.
In essence, GMX isn’t just deserving of the grant; they represent the very ethos of what Arbitrum stands for: innovation, collaboration, and a brighter, decentralized future. We at Struct wholeheartedly support their proposal and look forward to witnessing the continued growth and success of the Arbitrum ecosystem.
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28% is excessive
GMX doesn’t even have 20% of the perp DEX volume on Arbitrum and perps DEXs obviously aren’t the only protocols on Arbitrum.
And volume market share is consistently trending downwards.
Are these grants here to reward past contributions to the chain or to help keep Arbitrum as one of the market leaders in the future?
https://twitter.com/TheMetaverseGuy/status/1708163149248045232
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I don’t believe comparing one low-volume month of trading volume between the protocols is particularly enlightening.
Plus, you’re comparing GMX’s non-incentivized volume with incentivized volume. There are better metrics to use - at the very least alongside volume as it’s easily gamed - such as Open Interest, fees, number of transactions, generated gas fees, etc.
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It’s not one low-volume month; GMX’s volume share has consistently fallen all year.
True, it would be very interesting to see how HMX and Vertex perform without incentives. Vertex is moving from high pre-launch incentives to long-term incentives, so it will be interesting to see if that makes a difference.
Yes, there are lots of metrics that can be used, but the case for GMX has primarily been based on one metric: TVL, and I think volume is a more telling metric
Regardless 28% for a protocol whose power seems to be declining is excessive, whichever way you want to measure it.
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Your analysis you link to on Twitter is fundamentally focused on volume, and uses the September month as an example. That’s why I mentioned it. Volume is easily inflated, and September was a low-volume month in a generally low-volume year. That’s why it’s a problematic basis for a thorough analysis.
The case for GMX is not based primarily on TVL or volume, as outlined in the proposal that starts this thread. It’s also based on fees, protocol revenue, gas consumption, and user base. That set of metrics makes for a more complete picture.
And alongside those meaningful metrics, there is the overarching argument: the Arbitrum DeFi vision GMX has helped drive, and the ecosystem it has helped nourish through its collaborative approach.
That’s more than a mere marketing claim. 60+ protocols on Arbitrum have integrated with GMX, and partly rely on it as a base layer. That is a true measure of success, imho.
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As @Jonezee mentioned, its about what the protocol brings to the ecosystem, and GMX has demonstrably proven it is the leader in this aspect. Just as with v1, v2 will spawn a new breed of protocols building on top of the new contracts which were designed with composability in mind.
re volume, call it cherry picking data if you wish, but with general low interest in crypto trading the last few months those that have “stolen” market share offer non-crypto assets for trading, therefore i would absolutely not agree that volume is a telling metric at all. v2 will address this and allow users to trade non-crypto assets.
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Indeed, it was very focused on volume, and as mentioned in the tweet, this was partly in response to the Castle Cap tweet focusing on TVL. September only factored into the end of the long post; however, the chart posted above, also in the tweet, shows a pretty clear trend of decline throughout the year.
Protocol revenue is also also declining.
If you exclude the recent STIP grant proposal bump, so are daily active users and new users.
GMX has undoubtedly been instrumental in Arbitrum’s success to date, and collaboration is admirable, but correct me if I’m wrong, the aim of the grant is to grow the Arbitrum ecosystem in future, not to reward protocols for contributions in the past.
Does GMX give Arbitrum 28% of its value currently?
Even more critical, considering the loss of market share, do you think GMX will give Arbitrum 28% of its value in a year?
The extortionately high grant request seems to be more an effort to save GMX in the short term rather than grow the Arbitrum ecosystem in the long-term.
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Yes i’d argue GMX does give Arbitrum 28% of its value (if you look at TVL and the TVL of protocols built on top of GMX)
GMX has retained the dominant share of open interest (add another $25m onto GMX to include v2) this while as i mentioned above interest in crypto has declined greatly over the last few months.
Again, because volatility in crypto is at it is lowest point in history.
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It’s very refreshing to see someone posting objective truths about GMX, thank you. The bias in favor of GMX while ignoring objective data and facts is very concerning.
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thanks for the input!
i think this criticism has some teeth to it, if only there were comparative data to see the most referenced data points (gas spend, TVL, volume, OI) of perp DEXs across their Lifetime-to-Date; it would certainly help your case more (if the analysis is correct) and generally would help those passing through the forum have a better gauge of the overall grant space as it stands
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A large part of that claim seems to be based on GMX’s TVL, which at $427.28m is over twice the size of Uniswap’s Arbitrum TVL, the second largest on the chain. But it’s difficult to compare DEXs to other DEXs based on TVL alone, let alone different types of protocol, as some protocols require little to no TVL to operate efficiently. And as TVL takes time to build up and fall, it is, at best, a lagging indicator of success and, at worst, a vanity metric.
Firstly, shouldn’t those protocols built on top of GMX get their grants directly if they are worthy? Why does GMX get a cut?
Secondly, the ‘built on top’ argument raises other concerns. As you and Jonezee have highlighted, many protocols are already built on top of GMX, and a grant of this size would undoubtedly encourage more. But if GMX continues its current decline, which seems likely, then those new protocols will go down with the ship. Consequently, instead of this grant having a positive effect on the Arbitrum ecosystem, it could have a massive negative effect.
It would be much better if the grants in general, but for GMX in particular, were smaller and more widely distributed to help diversify the Arbitrum ecosystem.
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Devin from GammaSwap here. Although this is a large amount, in my opinion, GMX deserves it. There is no Arbitrum without GMX.
GMX was one of the first protocols to launch on Arbitrum and still by far the most successful native project. They have brought hundreds of millions of assets on to the chain from Ethereum and brought a massive inflow of net new users to the ecosystem.
Many projects have done token swaps with GMX, including us, and have products that could not exist without their protocol: Jones DAO, Rage Trade, Umami and countless others.
They have set a new paradigm in building sustainable liquidity to fund derivatives trading in novel CFD (GMX V1) and a more safe + simple vAMM model (GMX V2).
I’m confident that if they receive the requested funding it will only cement Arbitrums current status as the leading L2 and widen the divide further between other L2s like Optimism.
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Please find our revised response in the reply, in light of the budgetary constraints we have seen.
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Hello everyone, Nitro Cartel weighing in here. First off, a big shoutout to GMX for laying out such a comprehensive proposal. It’s clear to see that the GMX team and all of us in the community share a common goal - pushing Arbitrum to the next level and establish it as undoubtedly the strongest scaling solution of Ethereum.
GMX’s V1 has been very impressive. It wasn’t just about creating an innovative platform, but they managed to retain a significant user base, including community members that remained loyal to both GMX and Arbitrum, consistently bringing in fees and positively contributing to the ecosystem. That kind of success doesn’t happen by accident, and it speaks volumes about their commitment. We believe V2 is a game changer that is not appreciated enough yet.
We are also glad to see GMX’s three-tier token distribution approach in the proposal. By aiming to grow the user community, boosting trade incentives, and supporting teams building composable products on top of v2, they’re crafting a roadmap that benefits everyone involved. Their foresight in ensuring a fair grant distribution is commendable. It’s a clear signal that they want to reward genuine effort and contribution.
Regarding the grant size, given what GMX has already accomplished, and their big plans ahead, it seems like a fair ask. Investing big in an established and committed player like GMX could potentially yield huge benefits for Arbitrum.
All in all, from Nitro Cartel’s perspective, this proposal holds a lot of promise. We look forward to the upcoming growth of GMX v2.
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When i see Innovation High coming from big investors not disclosing their interests, I am sure Arbitrum is not what they want to take care about. GMX have big strengths, but they are certainly not great innovators. It hurts to see our grants forums be parasited by bag holders.
For Arbitrum sake, I appreciate what GMX brought but they are certainly not 28% of our future. A bunch of others perp are already surpassing them in a lot of areas, their volume is fading away. It’s great to say GMX is a dinosaur we cherish, but boosting their sinking and leaking financial structure with more than 10% of our grants is a pure aberration.
I would accept no more than 5M grant which is already around 10% of our money. Let’s thanks the past, and invest in our future gems.
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Thanks for your thoughts
Again as many iterated (and not to cherry pick data) but in the rare days we have had crypto volatility in the last few months GMX has almost always posted large amounts of volume (largest on arbitrum in almost all those cases).
In my opinion, it is a sign of the market rather than GMX’s share of the market.
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I agree with this sentiment, not to insult any of the other fine fine protocols here but GMX is Arbitrum.It’s one!
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