Introduction
Abstract of the GMX S.T.I.P. Proposal:
- The grant application aims to increase adoption and activity on GMX V2 for DeFi on Arbitrum.
- The proposal focuses on creating diverse and liquid perpetual and spot pools that generate yields composable with other protocols.
- Approved incentives include 12.0 million ARB tokens, with up to 2 million ARB tokens for a GMX-administered liquidity and volume program for ecosystem partners.
- Key areas of focus include converting CEX users to DEX users, promoting Arbitrum protocol development on GMX V2, incentivizing liquidity provision, and fostering a vibrant on-chain trading environment.
The 12 million ARB tokens allocated to GMX under the STIP Program will be distributed over 12 weeks, divided into weekly epochs. The token incentives will be used towards:
- Liquidity Incentives
- Trading Incentives
- Grants Incentives
Each of the three incentive categories is explained in further detail below, with their corresponding ARB distributions tracked.
GM Liquidity Incentives
GMX’s S.T.I.P. proposal prioritises creating a range of highly liquid perpetual and spot pools for GMX V2. These GM pools are yield-generating, capital-efficient and composable with other protocols: they form a robust DeFi base layer for the Arbitrum ecosystem.
The GM Liquidity Incentives are divided into two types:
- Incentives for GM Liquidity Providers
- Incentives for migrating GLP liquidity to the GM pools
Incentives for GM Liquidity Providers
- Allocations of Incentives for GM Liquidity are based on weekly epochs.
- Every epoch, a set number of ARB will be allocated per each GM.
- 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 after the completion of each epoch.
- APR and other information shown on the Earn/Pools page is a rough estimate; actual rewards depend on the final calculations at the end of each epoch.
- The amount of ARB for each epoch and the conditions for distribution under this program may be amended from time to time, to make sure they meet the goals of GMX’s STIP proposal in the most cost-effective way.
Incentives for migrating GLP to GM liquidity
- To encourage existing GLP liquidity providers to provide liquidity to GMX V2, a limited-period migration program has been set up.
- On the first 100m ARB equivalent of eligible migrations, they will be rebated the lower of 0.25% or actual redemption fees paid.
- On the next 100m ARB equivalent of eligible migrations, they will be rebated the lower of 0.10% or actual redemption fees paid.
- This campaign has a planned maximum cap of up to 350,000 ARB and is on a first-come, first-serve basis.
- GM mint should occur in the same epoch as the GLP burn, to be eligible for migration incentives.
- ARB incentives will be airdropped directly to GM holders after the completion of each epoch.
- Epochs reset weekly on Wednesday at 00:00 UTC.
- This program will end on December 31st, and any unutilised funds will be redirected within the GMX STIP initiative.
Trading Incentives
GMX aims to bring trading fees on the decentralised perpetual exchange to 0.02% on average – a level comparable to that of leading centralised exchanges. Lower trading fees will encourage traders to move on-chain, helping to convert CEX users to DEX users.
While trading on GMX, you’ll earn trading fee rebates in ARB tokens. These fee rebates can add up to cover the total cost of GMX’s base trading fees (though never more than that).
Not all trades will be equally incentivised, with rebate multipliers for specific trading actions. The goal is to incentivise utilisation and not to pay for trading activity.
Trading incentives will be paid out against all qualified trades during every weekly epoch.
Additional details of the GMX Trading Incentives program will soon be announced. Please stay tuned.
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Grant Incentive**
Overview
Following the approval of GMX’s Short-Term Incentive Program proposal, GMX will allocate up to $2 million in $ARB tokens to support projects integrating with Arbitrum. This allocation aims to boost the adoption of Arbitrum and GMX V2 by assisting projects that meet specific criteria, such as wallets, crypto gateways, and upcoming protocols. GMX will collaborate with the Arbitrum Foundation and/or the Liquidity Multisig to ensure compliance, strengthening the connection between GMX’s growth and the broader Arbitrum ecosystem.
These integrations will distribute incentives to users who utilize GMX contracts, aligning with the program’s objectives. Users can receive grants for providing liquidity, trading, enhancing GMX’s features, and completing integrations, grants, and Request For Proposals (RFPs).
Committee Members
The committee, composed of core contributors and ecosystem members, will be supported by a grant administrator. Initial committee members include KR_GMX, coinflipcanada, jonezee, jrogon, tanoeth, kalcrypto, and shogunfx1. Saurabh Dhekale, a grant administrator with prior experience in grants programs, will oversee the process.
Decision-Making Process
The committee will utilize the Gitcoin grant architecture and post third-party grant applications on gov.gmx.io for community input. Distributions towards liquidity and trading incentives will be determined after seeking feedback from risk managers and ensuring grant program requirements are met. Labs and the Grants Committee have the discretion to approve, disapprove, or disqualify grants, subject to GMX governance review and possible snapshot/tally votes.
Program Details
- We will kickstart the grants program on November 8th, 2023.
- The grant budget will be up to $2 million ARB which can be used for grant incentives.
- The grants will be distributed in three categories: Microgrants, Open Grants, and RFPs.
For more information about the program, please visit the Grants Page.
To submit the application, visit the governance forum.
Disclaimer:
The content presented is for informational purposes only and does not constitute legal, financial, or investment advice, nor represent a binding legal agreement.
While discussions and voting may transpire on GMX DAO’s official social media channels, it’s crucial to understand that contributors act independently. Any discussions or proposals should not be construed as a commitment or obligation by any individual contributor.
No warranties or representations are made regarding the accuracy, completeness, or suitability of the information presented, and no liability will be accepted for any losses, damages, or adverse consequences that may arise in relation to this discussion or proposal.
It is strongly advised to undertake your own due diligence and seek advice from relevant professionals before decisions are made based on the content of this proposal or related discussions.