[GMX] Bi-Weekly Update [29/7/2024]
Recap of the Previous Two Weeks
ARB Received Last Disbursement: 1,800,000 ARB
ARB Utilized as Incentives in the Last Two Weeks: 844557.03 ARB
Liquidity Incentives: 334,889.30 ARB
Trading Incentives: 324,882.95 ARB
Trading Incentive bonus: 149784.78 ARB
Grants Incentives: 35,000 ARB
Contracts incentivized over the last 2 weeks:
Contract address label Form 56 completed for all addresses: Yes
ARB left over: 1264857.53 ARB
Plan for leftover ARB: Continuing with Liquidity Incentives, Trading Incentives, and Grants Incentives campaign.
Summary of incentives:
Liquidity Incentives
GMX V2 works with a range of highly liquid pools that facilitate all perpetual and spot trading activity. These GM pools are yield-generating, capital-efficient and composable with other protocols: they form a foundational DeFi base layer for the entire Arbitrum ecosystem.
The GM Liquidity Incentives on Arbitrum are divided into two types:
- Incentives for Liquidity Providers to the GM pools of GMX V2
- Incentives for the newly launched Single-Asset GM pools.
Incentives for GM Liquidity Providers
- All GMX’s GM pools on Arbitrum, except the swap-only pools, are eligible for liquidity incentives. These incentives boost the native returns based on pool fees.
- The allocation of incentives for GM Liquidity is based on weekly epochs. Every epoch, a set number of ARB will be allocated per GM pool.
- A time-weighted average of users’ GM balance is taken for the whole week to calculate proportional rewards.
- ARB incentives will be airdropped directly to GM holders’ wallets after each epoch. Please note that there is a threshold of 0.1 ARB to qualify for the rewards airdrop.
- The APYs and other information shown on the Earn/Pools page are rough estimates; actual rewards depend on the final calculations at the end of each epoch.
- The amount of ARB for each epoch may be amended from time to time to ensure they meet the goals of GMX’s STIP-Bridge incentives in the most cost-effective way.
- The Liquidity Incentives are expected to be maximised at around 25% APR for each GM pool.
Incentives for new Single-Asset GM pools
- GMX will especially incentivise its single-sided GM liquidity pools, which have just one token backing the market on both the Long and Short sides. These liquidity pools do not have a stablecoin component.
- Any newly launched Single-Asset GM pools will also receive liquidity incentives to help bootstrap deep, healthy markets quickly.
Trading Incentives
GMX aims to bring trading fees on the decentralised perpetual exchange to 0.02% on average – a level that is competitive with the trading fees of the VIP tiers of leading centralised exchanges. Lower trading fees will encourage traders to move on-chain, helping to convert CEX users to DEX users.
- Traders receive rebates of up to 75% of trading fees on opening & closing positions across all GMX V2 crypto markets on Arbitrum
- These fee rebates can add up to cover almost the total cost of GMX’s base trading fees, when combined with a GMX referral-code fee discount (though never more than that).
- Not all trades may be equally incentivised, as the goal is to incentivise optimal utilisation rather than pay for trading activity.
- Trading incentives will be paid out against all qualifying trades during the weekly epoch.
- The trading fee rebate will be airdropped as ARB tokens on a pro-rata basis, at the end of each epoch. Please note that there is a threshold of 0.1 ARB to qualify for the rebate airdrop.
- Total trading fee rebates will be capped during every epoch. If the rewards cap for the epoch has been reached, the actual rebate could be less than the maximum rebate percentage of 75%.
- In the 3rd week of trading incentives, we distributed approximately 149907.73 ARB to 1773 of traders.
- In the 4th week of trading incentives, we distributed approximately 174975.21 ARB to 1891 traders.
- In weeks 3 and 4, we distributed 324,882.95 ARB to 3664 traders.
The trading incentives provided by GMX fell significantly short of their projected goal in the 3rd week. The aim, as communicated through various channels, had been to ‘reduce trading fees on GMX by up to 75%’.
The 150,000 ARB provided for trading incentives only resulted in a net trading fee rebate of around 15%, due to a decrease in the value of ARB coupled with a vast increase in trading volume on GMX.
This disparity resulted in some critical community feedback, and reflection on the allocation and its underlying assumptions.
To compensate for the unexpected shortfall, the GMX Grants Committee decided to provide an additional 149784.78 ARB as trading incentives for this past week.
This one-time retroactive bonus distribution brings the actual rebate more in line with the stated aim.
Grants Incentives
We started the grants incentives program on June 3, with a focus on projects building in the GMX ecosystem to support them in increasing on-chain activity and bringing more liquidity to the protocol. So far, we have received around 29 applications and have accepted approximately 9 of them. We will be making upfront payments to the newly accepted grantees, with further disbursements depending on the achievement of KPI milestones.
We closed down our grants program on June 24th. Considering the numerous proposals already received, the STIP Bridge timeline, and the limited grants budget, the grants committee decided this was the most sensible course of action.
Grantee Highlights
- After its grant was approved, KnightSafe generated a trading volume of around $130 million and TVL deposits of 21 million in its vaults.
- Since its grant application was accepted, Goldlink vault have seen deposits worth $900,715.16 in their vaults.
Additional Info / Disclosures to Multisig: N/A
STATS
Average daily TVL:
- Overall: $438,389,810.63
- V2: $347,372,577.30
- V1: $91,017,200.62
Average daily transactions:
- Overall: 153
Average daily volumes:
- V2: $152,155,485.59
- V1: $23,874,678.96
Number of unique user addresses:
- Overall: 2,448
- V2: 1,925
- V1: 523
Transaction fees:
- Overall: 0.67 ETH
- V2: 0.45 ETH
- V1: 0.22 ETH
Link to Dashboard showing metrics: https://dune.com/gmx-io/gmx-analytics
We added 2 new trading pairs, WIF and PEPE on GMX V2 for traders, and we will be adding a few more tokens in the coming weeks.
Plan For the Next Two Weeks
Amount of ARB to be distributed: 800,000 ARB
Liquidity Incentive: 350,000 ARB
Trading Incentive: 350,000 ARB
Grants Incentive: 100,000 ARB
Contracts that will be incentivized:
Contract address label Form 56 completed for all addresses: Yes
Mechanism for distribution incentives: Distributed via an Airdrop
Summary of incentives plan:
We plan to disburse 175,000 ARB in the 5th week and 175,000 ARB in the 6th week for liquidity incentives. As for the trading incentives, based on the current trading activities, we will disburse 175K ARB in the 5th week, followed by 175K ARB in the 6th week.
Our grantees have been making excellent progress, and the grants committee has been providing assistance throughout the process. Our current priority is to support the grantees in completing their milestones as quickly as possible. Once the grantees successfully complete their milestones, we anticipate disbursing approximately 100,000 ARB.
Summary of changes to the original plan: N/A