Executive summary
We are excited to provide the final report on how the 12 million ARB grant received from the Arbitrum DAO for the GMX S.T.I.P. campaign was utilised.
The campaign’s main goals were to:
- Stimulate on-chain engagement with DeFi on Arbitrum by increasing the adoption of and activity on GMX V2.
- Create a range of perpetual and spot pools that are highly liquid, yield-earning, composable and capital-efficient.
- Utilise part of the STIP grant for a GMX-administered Grants Program for Arbitrum ecosystem partners building on GMX V2.
- Convert centralised exchange users to DEX users, and foster a vibrant on-chain trading environment.
Were the campaign goals successfully achieved? In this executive summary, we’ll examine the evidence and discuss some highlights.
1. Liquidity Incentives
Liquidity Incentives were distributed to all the GM liquidity pools of GMX V2 on Arbitrum, to encourage capital inflows.
The main results:
- GMX v2 experienced an unprecedented surge in Total Value Locked (TVL). Within a remarkably short timeframe, TVL rapidly grew from $80 million to a peak of over $400 million.
- GM Pools allowed Liquidity Providers to have more granular control over their liquidity provision compared to GMX v1 (the multi-asset GLP pool). Since the introduction of GM Pools, the best-performing markets were SOL/USD, XRP/USD, and ARB/USD, which outperformed their standard DEX AMM pool benchmarks by 37.31%, 23.53%, and 20.78%, respectively. Additionally, the average performance across all GM liquidity pools was 15.64%, highlighting their capital efficiency and robust performance.
- The liquidity incentives program successfully attracted significant liquidity to the protocol. As a result, GMX v2 experienced improved market depth and stability, enhancing the overall user experience for traders. A week after incentives concluded, V2 still enjoys a TVL of $290M: more than 360% growth from its baseline of $80M.
- New GM Pools were introduced for 6 assets: AAVE, NEAR, BNB, OP, AVAX, and ATOM. This broadened the range of markets available to traders and Arbitrum ecosystem partners to build on.
- DeFi users bridged $98 Million into Arbitrum across these newly available assets (SOL, AVAX, WBNB, OP), thereby boosting Arbitrum’s goal of being the premier asset layer within Ethereum DeFi.
2. Trading Incentives
Trading Incentives, in the form of fee rebates, were offered to all traders on the GMX V2 markets. The goal was to encourage engagement with GMX v2 on Arbitrum and to stimulate CEX traders to experiment with trading crypto non-custodially on-chain.
The main results:
- Over its eight months of existence, GMX v2 has generated a total trading volume of $34.38B. From the start of the STIP campaign (in the second week of November), v2 trading volume shows a clear upward trend.
- March was the most successful overall month, with the STIP incentives boosting GMX v2 trading volume up to $7.74B, and $14.52M in protocol fees collected.
During the entire STIP incentives campaign, GMX accumulated over $29.72B in volume and generated $27.10M in fees. This was the highest fee generation across all perpetual DEXes, demonstrating the demand among traders and the product-market fit of v2.
3. Grants Program
A portion of the STIP grant was dedicated to supporting projects built on the GMX v2 platform, fostering innovation and development within the broader Arbitrum ecosystem.
The main results:
- GMX funded 22 applications out of 54 funding applicants, with 1,673,500 ARB allocated to the grantees. Based on their achieved milestones, ~1,290,000 ARB was ultimately distributed to the grantees.
- Our grantees generated close to 518 million in trading volume on GMX v2 and achieved a combined TVL of 40 million on their platforms, contributing to increasingly liquid on-chain markets.
Overall, the evidence suggests that GMX’s use of the Arbitrum DAO STIP grant has been a success. The allocated funds were effectively deployed, achieving the overarching objective: driving significant on-chain engagement with DeFi on Arbitrum.
The liquidity and trading incentives programs have driven growth and engagement on GMX v2, while the grants program has fostered the broader Arbitrum ecosystem.
A more detailed report underpinning these conclusions is available below.
Full Report
History
GMX is a decentralised spot and perpetual exchange where traders benefit from low fees, deep liquidity, reduced liquidation risks, and transparent pricing. Liquidity on GMX is user-contributed, and liquidity providers earn a large share of the fees the protocol generates from market making, swap fees, and leverage trading.
GMX had applied for the STIP grants, the first ecosystem incentive grants program for the Arbitrum DAO, and presented a proposal to the DAO asking for 14 million ARB in grant funds. Based on the large number of grant requests, community response, and delegates’ feedback, the ask was subsequently lowered to 12 million ARB. After the proposal passed, we aimed to distribute 5 million ARB towards liquidity incentives, 5 million ARB towards trading incentives, and up to 2 million ARB towards grant incentives.
This final report outlines the effectiveness of the STIP grant used by GMX towards the growth of GMX v2 through the incentive program. The program encompassed incentives for traders, liquidity providers, and grants within the protocol ecosystem. Through this initiative, GMX aimed to stimulate trader activity, enhance liquidity, encourage development within its ecosystem, and grow GMX v2. Additionally, this report provides an overview of the program’s objectives, implementation strategies, outcomes, successes, and recommendations for future iterations.
GMX launched its incentive program on 8/11/23 with the following objectives:
- Creating a diverse range of perpetual and spot pools that are highly liquid and capital-efficient. These pools, with liquidity provider tokens, will generate yields that are composable with other protocols.
- Converting CEX users to DEX users, reducing the trading fees on the decentralised perpetual exchange to a level comparable to the VIP tiers of leading centralised exchanges.
- Listing multiple token markets for traders to trade on GMX v2 on-chain without needing to custody their funds.
- Supporting builders with our grants program (mini-STIP) and promoting the development and integration of Arbitrum protocols on GMX V2.
- Providing seamless integration with popular wallets and ensuring a user-friendly experience for all participants.
- Continuing to build a vibrant and inclusive community of developers, traders, liquidity providers, and ecosystem projects that contribute to the overall growth and success of GMX v2
Program Overview
Grant Allocation:
- Liquidity Incentives: The liquidity incentives portion of the grant was directed towards incentivising liquidity providers to maintain deep liquidity on GMX’s trading markets. This was achieved through various mechanisms, assessing metrics like utilisation ratios, APR of pools, and other mechanisms to develop strategic ways to boost TVL, utilisation, and trader growth.
- Trading Incentives: A significant portion of the grant was allocated to trading incentives aimed at encouraging active trading within the GMX v2 ecosystem. This involved implementing trading competitions, rewards for high trading volumes, and initiatives to enhance market utilisation.
- Grant Incentives: A portion of the grant was dedicated to supporting projects and initiatives within the GMX ecosystem through grant programs. These grants were awarded to promising projects, teams, or individuals building on or contributing to the GMX v2 platform. The objective was to nurture innovation and development within the ecosystem.
1.) 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 were divided into two types:
- Incentives for GM Liquidity Providers
- Incentives for migrating GLP liquidity to the GM pools (ended on January 30)
Incentives for GM Liquidity Providers
- All GMX’s GM pools on Arbitrum were eligible for liquidity incentives, providing a boost to the native APRs based on pool fees.
- Allocations of Incentives for GM Liquidity were based on weekly epochs. Every epoch, a set number of ARB was allocated to each GM pool.
- A time-weighted average of users’ GM balance was taken for the whole week to calculate proportional rewards.
- ARB incentives were airdropped directly to GM holders after the completion of each epoch. Please note that there was a threshold of 0.1 ARB to qualify for the airdrop.
- APR and other information shown on the Earn/Pools page of the GMX dApp are rough estimates; actual rewards depended 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 were amended from time to time, to ensure they met the goals of GMX’s STIP proposal in the most cost-effective way.
LIquidity Incentives
| Epoch Stage | Amount (ARB) |
|---|---|
| Epoch 1 | 200000 |
| Epoch 2 | 300000 |
| Epoch 3 | 300000 |
| Epoch 4 | 300000 |
| Epoch 5 | 300000 |
| Epoch 6 | 310000 |
| Epoch 7 | 290000 |
| Epoch 8 | 290000 |
| Epoch 9 | 290000 |
| Epoch 10 | 275000 |
| Epoch 11 | 240000 |
| Epoch 12 | 230000 |
| Epoch 13 | 220000 |
| Epoch 14 | 200000 |
| Epoch 15 | 200000 |
| Epoch 16 | 205000 |
| Epoch 17 | 240000 |
| Epoch 18 | 275000 |
| Epoch 19 | 275000 |
| Epoch 20 | 275000 |
| Total amount Spent | 5,215,000 ARB |
GLP <> GM Migration incentives
| Epoch Stage | Amount (ARB) | Receivers |
|---|---|---|
| Epoch 1 | 12564.31 | 283 |
| Epoch 2 | 3211.70 | 44 |
| Epoch 3 | 2222.07 | 65 |
| Epoch 4 | 70724.10 | 122 |
| Epoch 5 | 8917.96 | 60 |
| Epoch 6 | 529.24 | 21 |
| Epoch 7 | 2562.61 | 42 |
| Epoch 8 | 4029.53 | 41 |
| Epoch 9 | 21828.67 | 329 |
| Epoch 10 | 27908.18 | 72 |
| Epoch 11 | 887.40 | 32 |
| Epoch 12 | 4821.33 | 20 |
| Epoch 13 | 717.00 | 46 |
| Epoch 14 | 92.14 | 27 |
| Gas Fees | 5454.55 | N/A |
| Total Spent | 166470.79 | N/A |
Incentives for migrating GLP to GM liquidity
- To encourage existing GLP liquidity providers to provide liquidity to GMX V2, a limited-period migration program was set up.
- Users were eligible for Fee Rebates for manually redeeming GLP, as long as they purchased GM tokens thereafter with the same wallet during that epoch.
- The maximum Fee Rebate was based on the USD value of the GM purchase, in case the value of GLP redeemed prior was higher.
- On the first 100m ARB equivalent of eligible migrations, they were rebated the lower of 0.25% or actual redemption fees paid.
- On the next 100m ARB equivalent of eligible migrations, they were rebated the lower of 0.10% or actual redemption fees paid.
- This campaign had a planned maximum cap of up to 350,000 ARB and was on a first-come, first-serve basis.
- GM mint must have occurred in the same weekly epoch as the GLP burn, to be eligible for migration incentives.
- ARB incentives were airdropped directly to GM holders after the completion of each epoch. Please note that there was a threshold of 0.1 ARB to qualify for the airdrop.
- Epochs reset weekly on Wednesday at 00:00 UTC.
Please note: this GLP migration incentives program ended on January 30th. The unutilised funds were redirected within the GMX STIP initiative.
The above graph compares the price of GM Markets with a 50/50 hypothetical index of the underlying (volatile asset and stablecoin) that is rebalanced every day, starting at the same price as GM. The GM price is a historical plot, while the index follows the price action of the underlying crypto asset at 0.5x over the same period.
In almost every instance, the pool’s GM price ended up higher than the hypothetical rebalanced 50/50 position. Meaning, that if you started off holding an equal $ value of both the Index and GM, your GM position would end up being worth more in $ value.
GM tokens are already being integrated into various DeFi protocols. They are successfully used as collateral in multiple money markets: Aave, Dolomite, Solv, Abracadabra, Rodeo, Vaultka, Silo, GLoop, LodeStar, and Deltaprime come to mind.
Driving Growth through Liquidity Incentives
With the help of the STIP grant, we successfully started a Liquidity Incentives Program for GMX v2. Following the infusion of 5 million ARB liquidity incentives, GMX v2 experienced an unprecedented surge in Total Value Locked (TVL). Within a remarkably short span, TVL skyrocketed from $80 million to a peak of $400 million, demonstrating the substantial impact of our efforts.
With increased TVL, our protocol now offers deeper liquidity pools, reduced slippage, and enhanced trading opportunities for Arbitrum users, thereby encouraging a more vibrant and efficient ecosystem. This surge underscores the impact of our liquidity incentives in attracting and retaining liquidity providers (LPs) within our ecosystem. Moreover, through migration incentives and community engagement, we were able to effectively migrate liquidity providers (LPs) from our previous GLP pools to our new GM pools, promoting deeper liquidity and enhancing the overall resilience of our ecosystem.
Not only has this injection of liquidity strengthened our protocol’s market presence and resilience, but it has also facilitated increased participation from users seeking to capitalise on the yield opportunities of the GM pools. This growth signifies the confidence of investors and LPs in our protocol and underlines the importance of incentives in these challenging, competitive markets. We remain committed to further advancing the growth of GMX and the Arbitrum DeFi landscape, powered by innovative solutions and community-driven initiatives.
The liquidity incentives were initially intended to scale up as TVL grew, but with the extension of STIP over a longer period, we implemented a taper strategy. Additional ARB was allocated to newly launched markets like BNB, AVAX, ATOM, NEAR, OP and AAVE that were deployed on GMX v2.
In the process, GMX facilitated the arrival of new DeFi assets on Arbitrum. To expand the GMX V2 liquidity ecosystem, we worked with the Wormhole and Layerzero bridge solutions to onboard native assets like AVAX, SOL, WBNB and OP onto Arbitrum. This introduction allowed these blockchain communities to bring their assets onto Arbitrum for the first time ever. Close to 100 million USD worth of assets was subsequently transferred and put to use in Arbitrum DeFi, due to the introduction of new GMX V2 markets like AVAX/USD, SOL/USD, WBNB/USD, and OP/USD.**
With the major weighting of up to 80% for GMX V2 Pools supporting these assets, it adds credence to showcasing the impact of the growth and utilisation of these newly introduced assets on Arbitrum.
2.) Trading Incentives
GMX kickstarted the Trading Incentives campaign on 16/11/23. Our goal with the Trading incentive campaign was to provide users with a frictionless on-chain trading experience that could rival that of centralised exchanges.
GMX reduced the trading fees on the decentralised perpetual exchange to a level comparable to the VIP tiers of leading centralised exchanges. Traders on GMX v2 received a rebate of up to 75% of open and close fees, thanks to STIP. This allowed users to trade on-chain on Arbitrum without needing to custody their funds while enjoying trading fees as low as ~0.015%. In total, we distributed a sum of 4,984,768.84 ARB in Trading Incentives.
The Trading Incentives were designed to encourage active participation on the GMX v2 platform, while guarding against inefficiency and abuse. The total trading volume increased by 28.22% during the incentive period. The average daily volume on V2 during the campaign period was $197.84M.
| Epoch Stage | Amount (ARB) | No of users |
|---|---|---|
| Epoch 2 | 247997.41 | 2265 |
| Epoch 3 | 290762.44 | 1860 |
| Epoch 4 | 299951.94 | 2593 |
| Epoch 5 | 299958.41 | 2656 |
| Epoch 6 | 299956.95 | 2071 |
| Epoch 7 | 299968.29 | 2227 |
| Epoch 8 | 218181.67 | 2294 |
| Epoch 9 | 259946.64 | 3224 |
| Epoch 10 | 259958.07 | 3129 |
| Epoch 11 | 259940.61 | 2566 |
| Epoch 12 | 225189.01 | 2372 |
| Epoch 13 | 173352.29 | 2252 |
| Epoch 14 | 249942.64 | 2034 |
| Epoch 15 | 249965.03 | 2044 |
| Epoch 16 | 249927.78 | 2229 |
| Epoch 17 | 199902.48 | 2736 |
| Epoch 18 | 324935.21 | 2489 |
| Epoch 19 | 349955.01 | 3202 |
| Epoch 20 | 224976.96 | 2612 |
| Total amount Spent | 4,984,768.84 ARB | N/A |
The above image shows the impact that GMX has achieved with the STIP Trading Incentives. GMX has effectively utilised all the incentives and has been able to maintain mindshare across all the top Perp Dex’s, with more volume, protocol fees collected, and daily active users. GMX V2 generated total trading volume of over $25 billion by March 1st, demonstrating the demand among traders and showcasing the product-market fit of v2.
Despite fierce competition marked by aggressive liquidity mining and trading incentives campaigns from rivals, GMX has adeptly maintained its position as the leading protocol on Arbitrum in terms of Total Value Locked (TVL), fees, protocol revenue, and L2 gas consumption.
The DeFi community’s continued trust in the platform has fueled the further adoption of Arbitrum and solidified its user base, capturing 50% of the total Perpetual (Perp) market. GMX’s TVL and activity have exhibited remarkable stickiness, consistently locking between 15% and 30% of all TVL on Arbitrum over the past year. Additionally, GMX has consistently ranked among the top perpetual protocols in the broader DeFi ecosystem.
March was the most successful month in the overall incentives period, with close to $7.74 billion in trading volume on V2 and V2 Swaps, $379 million in GM Pools, $302 million and bringing in $14.52 million in overall protocol fees.
Trading Competition
We observed a lot of demand from our community to host a Trading Competition. So, we decided to launch a trading competition to celebrate the launch of GMX’s new Trading Leaderboard, which coincided with the introduction of EIP-4844 and ArbOS ATLAS (which vastly reduced gas fees on Layer 2s like Arbitrum).
By leveraging the trading contest alongside CEX wallet campaigns, we aimed to showcase the highly optimised post-EIP-4844 trading environment and encourage greater experimentation, attracting new traders to Arbitrum. We therefore hosted the GMX #EIP4844 Trading Competition, with a prize pot of 280,000 ARB tokens available for the winners. All trades on GMX V2 on Arbitrum automatically qualified for the competition.
The trading competition started on March 13, 2024, and consisted of two contest phases, each lasting for a week. The first trading contest commenced on March 13 and ended on March 20. The second trading competition began on March 20 and ended on March 27. During this period, users who traded on the platform and ranked on the leaderboard were eligible for a share of the competition’s prize pool.
Engagement with the trading competition was further boosted through active promotion on Coingecko, financed by GMX’s own marketing fund rather than STIP funds.
The contest was divided into two categories:
Top PnL ($):
The Top PnL ($) prizes were awarded to the 1st-18th highest notional PnL ($), based on the total realised and unrealised profit and loss for the competition period, including fees and price impact.
Top PnL (%):
The Top PnL (%) prizes were awarded to the 1st-18th highest PnL according to percentage gains. In this case, PnL (%) is defined as [PnL / Capital Used].
Every trader on the platform was eligible for both prize categories, and the prize breakdown was as follows:
Prizes for Top PnL ($) Category:
- 1st Highest Notional PnL: 50,000 ARB
- 2nd Highest Notional PnL: 25,000 ARB
- 3rd Highest Notional PnL: 10,000 ARB
- 4th-18th Highest Notional PnL: 1,000 ARB
TOTAL: 100,000 ARB * 2 weeks = 200,000 ARB
Prizes for Top PnL (%) Category:
- 1st Highest PnL (%): 10,000 ARB
- 2nd Highest PnL (%): 7,000 ARB
- 3rd Highest PnL (%): 5,000 ARB
- 4th-18th Highest PnL (%): 1,200 ARB
TOTAL: 40,000 ARB * 2 weeks = 80,000 ARB
Driving Growth through Trading Incentives
The introduction of trading incentives, through the allocation of 5 million ARB tokens, provided a notable boost to user growth within the GMX ecosystem, which had already been trending up. The protocol’s exceptional performance in fee collection within the Perp DEX sector further solidifies GMX’s position. The availability of trading incentives attracted new users plus encouraged existing users to increase their participation levels, resulting in a surge in trading volume and fees collected on GMX.
Analysing the data, GMX Protocol has consistently outperformed its competitors in fee collection, surpassing all other Perp Dexes in the market. This achievement underscores GMX’s effectiveness in capturing value from the derivatives trading ecosystem. GMX’s achievement can partly be attributed to the implementation of the STIP trading incentives, designed to encourage increased trading volume and activity within the protocol. As you can see in the market screenshot below, after the incentives, GMX has collected the highest amount of protocol fees across all Perp Dexes.
3.) Grant Incentives
The Objective
The main aim of the grant initiative was to encourage the growth of the broader, composable GMX V2 ecosystem, by offering development assistance through grant incentives. This would, by extension, increase liquidity and trading on GMX while boosting the Arbitrum DeFi sector. The support was targeted towards wallets, Telegram bots, projects integrating with GMX V2’s GM Pools, and emerging protocols that meet specific requirements and provide maximum safety and security for users.
Our goal with the integrations was to distribute incentives to users who utilise GMX V2 contracts through these integrations in a manner that fits these objectives. These users will receive incentives for providing liquidity, engaging in trading activities, and contributing to the extension of GMX’s features.
The grants program has been instrumental in attracting new talent into the ecosystem and realising innovative ideas. The financial support, combined with the opportunity to contribute to GMX’s growth, has drawn numerous applicants from different backgrounds, thereby infusing the ecosystem with fresh insights and creative energy.
The program’s impact extended from the immediate beneficiaries of the grants to increased activity within the GMX ecosystem, thereby contributing to the overall growth and robustness of GMX V2.
GMX was committed to providing limited operational support to ensure the success of protocols building on top of GMX as a base layer. This approach reinforced the channel that connects GMX’s growth to that of the entire Arbitrum ecosystem, ensuring mutual benefits and collaborative development.
The Implementation
After much initial discussion among the GMX core contributors, and with concerns regarding the three-month timeline, we decided to adopt a committee-based model instead of a community one. This decision was made in light of the STIP timeline and to allow for faster implementation.
We established a Grants Committee for our grants program. The committee, as proposed, consisted of eight members. These members were a blend of core contributors, individuals from the community, and technical domain experts, all supported by a grant administrator coordinating the process. This diverse mix ensured a wide range of expert opinions on grant proposals. The committee comprises DeFi experts, technical developers, data scientists, and DeFi ecosystem and growth experts.
KR_GMX, Coinflipcanada, Jonezee, Jrogon, Tanoeth, Kalcrypto, and Shogun, as existing contributors to GMX, formed the initial grant committee members. Saurabh was appointed as a Grants Administrator based on his previous experience in the administration of grants programs.
After setting up the process, we worked on creating the grants template and setting up the landing page to enable grantees to navigate the grants process easily. The grants template was also subsequently implemented in the LTIPP program. We divided the grants program into three categories:
a) Open Grants - grants ranging from 10K ARB up to 100K ARB
b) Micro grants - grants ranging from 1K ARB up to $10K ARB
c) RFP’s
We implemented rigorous monitoring and evaluation mechanisms to track the grant recipients’ progress and ensure the funds were used efficiently and effectively. We also established precise reporting requirements for the grant recipients, requiring them to submit regular updates on their progress and use of funds. Through these mechanisms, we ensured that the grant funds were used in a manner that maximised their impact on the growth of the GMX V2 ecosystem.
The KYC for the grants program was managed end-to-end by BLG, who performed the process for the applicants. GMX paid them 3637 ARB as a service fee.
We used Gitcoin Grants Stack to provide the tooling to help the grants program run smoothly and decentralise the decision-making process.
Outcomes and Impact
We kickstarted the grants program on November 8th and, after receiving exactly 54 applications in the span of one month, we sunsetted the grants program on December 13th. While the grants program was active, we accepted 22 applications from the 54 received. The proposals that the grants committee did not support, were subsequently assisted by GMX’s business development contributors so they could continue building on GMX and Arbitrum.
The grants program attracted high-quality applications from a diverse range of projects and individuals, all aiming to contribute to the GMX ecosystem. After a thorough review process, we granted funds to 22 promising projects that demonstrated strong potential for advancing the ecosystem’s growth and innovation. We allocated around 1,673,500 ARB ARB to the grantees, and eventually disbursed close to 1,290,000 ARB.
The impact of the GMX grants program has been substantial. The funded initiatives have not only led to direct improvements in the GMX V2 tooling but also contributed to increased community involvement and enthusiasm. The resultant increase in liquidity has made GMX V2 more attractive to traders and investors. The grants-based incentive program also encouraged crypto users to try out the platform, leading to an increase in the number of active traders and significant growth in TVL.
In addition, the grant program has helped create accountability among the grantees, and a sense of community involvement and ownership. All the accepted grantees were required to submit bi-weekly reports on the GMX governance forum.
Overall, the GMX grants initiative served as a strong foundation for innovation, development, and improvements within the GMX and Arbitrum ecosystems. As we move forward, we aim to build on this success by continually refining our ecosystem-focused approach, taking into account the valuable feedback and experiences garnered through the grants program.
| Project Name | Amount Asked (Funds allocated) | Amounts disbursed for completing milestones |
|---|---|---|
| Binance Wallet | 28.5K ARB | 28.5K ARB |
| GMD Protocol | 100K ARB | 100K ARB |
| Perpie | 100K ARB | 100K ARB |
| GMX v2 Telegram & Discord Analytics | 10K ARB | 10K ARB |
| RabbitHole | 100K ARB | 50K ARB |
| Vaultka | 100K ARB | 100K ARB |
| Rodeo Finance | 100K ARB | 33.5K ARB |
| Tradao | 100K ARB | 100K ARB |
| Python SDK | 55K ARB | 55K ARB |
| Dolomite | 100K ARB | 25K ARB |
| DeltaPrime | 100K ARB | 95K ARB |
| Fluid | 100K ARB | 100K ARB |
| Symbiosis | 50K ARB | 10K ARB |
| Umami | 100K ARB | 100K ARB |
| Tradingview Alert Connector | 4K ARB | 4K ARB |
| D2 Finance | 100K ARB | 60K ARB |
| Rage Trade | 100K ARB | 100K ARB |
| Fungi Protocol | 6K ARB | 6K ARB |
| DappOS | 100K ARB | 100K ARB |
| Pear Protocol | 100K ARB | 40K ARB |
| Steadefi | 100K ARB | 50K ARB |
| OKX wallet | 20K ARB | 20K ARB |
| $1,673,500 ARB | $1,290,000 ARB |
Grants Project Highlights
Vaultka is a yield optimisation protocol for decentralised perpetual exchanges on Arbitrum, enabling users to maximise gains and tailor their strategies based on their risk preferences. Vaultka’s GM Leverage Vault is the market-first GM strategy vault built on top of GMX V2, aiming to bring higher yields to users, and channel liquidity to support activities on GMX V2.
Vaultka was one of the first protocols to devise an extensive proposal outlining the use of its vaults, its execution strategy, and its impact to date. They were accepted for a 100,000 ARB Grant to expand their USDC lending pool and attract further liquidity, aiming to boost it by $4 million and contribute over $5 million in TVL to the GMX V2 ecosystem within 12 weeks.
They surpassed expectations, achieving well over $23 million in TVL across all of its vaults on GMX V2, with 2,697 users, and over $10 million TVL in the USDC lending pool, reflecting a significant return on investment from the grant.
Overall, Vaultka’s successful integration still remains a fruitful part of GMX’s ecosystem currently sitting with $16 million in TVL for GMX V2 pools.
Fluid is enhancing cryptocurrency trading efficiency through the integration of GMX into social networks such as Telegram. Fluid aims to streamline the trading process, reduce financial risks, and foster community engagement by integrating with GMX, a leading decentralised trading platform. Fluid was one of the successful Telegram bots in the Ethereum ecosystem. Our goal with the grant was to bring them to the Arbitrum ecosystem. We offered them a 100,000 ARB Grant. Their goal was to achieve a volume of $12 million through their Telegram bot, and they surpassed our expectations by completing all the milestones, reaching $153 million in volume.
Umami Finance pioneered the accessibility for non-custodial real yield-generating vaults within the Arbitrum ecosystem; its yield strategies have helped foster the growth of GMX. Having had prior experience building on GMX with GLP vaults, its new GM vaults aimed to hedge and optimise strategies for generating yield for depositors.
Within its short-duration of 2 months, their vaults have drawn a total TVL of $7.82 million in GM pools to date. Even at the onset of this program in early February, the team anticipated $7 million, evidencing lack of current market offerings in BTC yield opportunities in DeFi (more can be read here).
Overall, these vaults showed substantial success in enticing greater growth for Umami, its users, and GMX as a protocol. They secured a grant of 100,000 ARB and were able to complete all the milestones.
Perpie is a Telegram bot powered by ERC4337 Account Abstraction, which allows you to trade perps on GMX easily and intuitively. With a focus on abstracted features and UI, trading through Perpie makes interactions a whole lot faster, more efficient, and reduces common overhead. The main goal is to onboard ‘normies’ into on-chain Perpetuals trading, without knowing they’re using DeFi at all. Perpie was awarded a 100,000 ARB grant for their AA TG bot, and they were able to complete all three milestones. They have achieved around $9.8 million in volume to date.
Rabbit Hole’s Quest Protocol aims to be the most efficient way for anyone to target, acquire, and engage on-chain users with token rewards. The Quest Terminal, a no-code tool, is used to deploy quests to the Quest Protocol. RabbitHole aggregates all quests from the Quest Protocol.
RabbitHole was awarded a 100K ARB grant for their Quest protocol. After their grant was initially accepted, they encountered difficulties hitting their milestones due to high gas fees. However, they conveyed this to the committee and reframed their milestones. The grant committee then approved the updated milestones. RabbitHole was able to hit their second milestones, but then the OBL report came out, revealing that RabbitHole’s incentives were being farmed by sybils. As a result, the grants committee decided not to grant them their third milestone. The highlight of this grant was their conquest campaign, which attracted 219 active Synthetix and OP users to GMX.
Rage Trade is a prime broker and perpetuals aggregator. Rage Trade aggregates EVM-compatible decentralized perp exchanges. It also streamlines the trading process using account abstraction, creating a CEX-like experience for users. Rage Trade secured a grant of 100K ARB. Their final milestone was hitting $27.5m volume and 1000 unique users.
They surpassed the milestones, completing all of them by reaching a volume of $183m and having 1009 unique users. Earlier this month, Rage Trade claimed one of the largest ever claims of GMX referral rewards, for over $29,274.
DeltaPrime is a DeFi margin protocol on Arbitrum and Avalanche. Users can borrow up to 5x their collateral from lenders, simply by connecting their wallet and depositing any supported (LP-) asset. DeltaPrime was awarded a 100K ARB grant. Initially, they were able to complete all their first 4 milestones. Even though DeltaPrime brought at peak $8.7 million TVL, they missed their fifth milestone target of $9 million TVL, which led to a 5K ARB penalty at the behest of this requirement of their grant application.
All in all, over the course of the five months of the incentive program being live for DeltaPrime, they were able to attract and retain more than $5 million in TVL.
DappOS is an intent-centric operating protocol providing a CeFi-like chainless user experience. DappOS V2 started to support GMX V1 and V2 in November 2023, improving the user experience and helping onboard users seamlessly from other chains like Polygon, Optimism, and Ethereum, to scale up trading volumes and TVL.
DappOS secured a grant of 100K ARB, and they were able to complete all their milestones while achieving a TVL of more than $5 million, $63 million in trading volume, and gain more than 30K+ unique users.
Pear Protocol has developed an innovative trading dApp that is currently live on the Arbitrum Mainnet. With this dApp, users can seamlessly and efficiently trade long-short ‘pair-trades’, such as going long on $BTC and shorting $ETH, with leverage. The trading process is capital efficient and allows for composability.
Pear Protocol was awarded a grant of 100K ARB and they were able to complete their first milestone.
Steadefi provides yield strategies that allow users with different risk profiles to earn yield profitably from DeFi’s best yield sources across any market conditions — bull or bear. We offered a 100K ARB grant to Steadefi. They were able to reach a target of $1.4 million TVL. Unfortunately, due to the STIP timelines, they were only able to complete 2 milestones of their grant application.
Rodeo is a decentralised finance protocol that allows its community to earn yield on a range of managed and passive investment strategies on Arbitrum. Rodeo Finance was offered a grant of 100K ARB and they were able to complete two milestones of the grant and have a total TVL of $600K.
Symbiosis is a cross-chain AMM DEX that pools together liquidity from different networks: L1s and L2s, EVM and non-EVM ones. Their know-how: 1-click native assets swaps and powerful API/SDK to enable third parties (including OKX DEX, OpenOcean and more) to process cross-chain swaps with ease.
Symbiosis was provided a grant of 50,000 ARB and they were able to complete the first milestone of the grant.
- GMD Protocol
GMD Protocol is a vault service provider established in 2022. They were able to drive interest into their Delta-Neutral vaults built on top of GMX on Arbitrum, achieving ~$15 million TVL. Their latest innovation is the GMX V2 Delta-Neutral vaults. After refining the proposal and application, GMD Protocol was accepted for a 100,000 ARB grant.
GMD Protocol was able to grow their V2 Vaults to as high as $14 million TVL, and generated close to $100K in total profits. However, as of March 25th, the protocol ended up sunsetting all operations except for these V2 Vaults, citing excessive losses due to an unexpected BTC market rally (from $20K → $45K → $60K+). As for the $100K profits from V2 vaults, they’ll go towards the liquidity of their token pairs. The team also cited they became demotivated from V1 losses and failed attempts at the STIP application.
Overall, this is clearly an unfortunate set of circumstances; we certainly didn’t anticipate such a trajectory. This indicates that incentives, by themselves, can not always be the solution to healthy protocol growth.
Fungi is a modular asset management protocol that enables the creation, management, and investment in on-chain funds. Leveraging the Diamond Standard (ERC-2535), Fungi brings scalability and high-speed iteration to the crypto asset management space and facilitates the development of dApps in the fields of passive investing, indexes, hedge funds, copy trading, automated strategies, and more. The Fungi Protocol was offered a micro grant of 6,000 ARB, and they were able to complete the grant and secure the funds.
This project aims to create an open-source SDK for GMX V2 using Python, which will allow users to: retrieve protocol information regarding pool amounts, open interest, volume, available markets etc. Increase, decrease, and manage positions. Manage liquidity positions and make swaps. Python SDK was awarded with a grant of 55K ARB and developer SniperMonke was able to complete all the milestones. Since the deployment on Sun 3rd March, there have been over 300 calls to download the SDK.
Tradingview-Alert-Connector is a free and noncustodial tool that allows you to integrate TradingView alerts and execute automated trading for perpetual futures DEXes. With an easy setup, devs can use TradingView strategy alerts to execute automated trades on GMX. We offered a micro grant of 4K ARB to Junta to build this solution.
This solution was widely used across different platforms like dYdX and Perpetual Protocol. With the grant, he was able to integrate it with GMX V2.
This is a suite of tools to monitor new positions, new swaps, and daily/weekly metrics on V2. These are currently accessible through Telegram bots and are integrated into the GMX community chats, created by one of the core contributors of the GMX community. The GMX V2 Telegram & Discord Analytics Telegram bot was awarded a 10K ARB micro-grant, as it aids the on-chain activity of many users. It assists in effectively monitoring various aspects of GMX (such as funding fee farming and notification of available liquidity) and in monitoring other users for copy-trading purposes. This tool has proven to be very effective.
Tradao is a Web3 Derivatives Portfolio Tracker that empowers traders with a comprehensive toolset and an innovative incentive system. We offered a 100K ARB grant to Tradao to build a Copy-trading solution on top of GMX V2.
Before the solution went live, they were already able to generate $50 million in referral volume on GMX V2. After their copy-trading solution launched on V2, they have completed all their milestones and generated an additional $13 million volume.
D2 finance offers Options-based Defi-vaults. D2.Finance aims to capture the sophistication of a top-tier hedge fund through innovative vault architectures. The project features a bespoke non-custodial smart contract vault, enabling user capital deposits during specifically timed funding epochs. These epochs are tactically aligned with the current opportunity landscape, setting them apart from the typical offerings in the DeFi vault sector that often rely on static strategies.
D2 Finance was awarded a 100K ARB grant. They were able to achieve their first two milestones successfully. They were also able to reach the trading volume target for the final milestone but couldn’t complete the TVL milestone.
Dolomite is a next-generation lending platform that boasts one of the most capital-efficient and modular protocols in DeFi. Dolomite offers comprehensive cross-margin lending with robust portfolio management through advanced order types, generic token routing, and a virtual liquidity system. Dolomite was accepted for a grant of $100K ARB, although they were only able to complete the first milestone of the grant.
- Binance Web3 Wallet
GMX is one of the first dApps available in the new Binance Web3 Wallet. Users are able to conveniently, securely, and non-custodially trade on GMX directly from the wallet.
We offered a 28,500 ARB grant to Binance Wallet for a promotion campaign to convert users from the centralised exchange to our on-chain DEX on Arbitrum.
- OKX web3 wallet
Similar to the Binance Web3 Wallet campaign outlined above, GMX provided a grant of 20,000 ARB to OKX web3 wallet for a campaign stimulating OKX users to experiment with GMX’s on-chain DeFi services. The aim is to convert CEX users to Arbitrum DeFi users in the most direct manner.
Grants Dashboard: https://dune.com/gmx-io/gmx-stip-dashboard
Grants Program TLDR
Overall, the GMX grants program has been a resounding success. The grants program has been a pivotal initiative for the further development of the GMX ecosystem and has helped grow GMX V2 significantly. It has demonstrated the power of community-led initiatives and shown how strategic investments can drive growth and innovation in a decentralised ecosystem.
By providing financial support and community involvement, the program has led to significant improvements within the ecosystem and has set a strong foundation for future growth. As we move forward, we will continue to use the grants program as a tool for creating sustainable growth in the GMX ecosystem.
Anti-Sybil and Anti-Abuse Parameters:
As mentioned in our STIP application, to ensure the integrity of the incentive program, anti-Sybil and anti-abuse parameters were implemented to prevent the incentives from being affected by bots or bad actors. These parameters generated organic volume and attracted genuine users to the Arbitrum ecosystem. Measures were established in consultation with the Liquidity Multi-sig and the GMX DAO to attempt to prevent fraudulent activities and ensure the program’s success.
By implementing this breakdown of incentives and incorporating anti-Sybil and anti-abuse parameters, we aimed to grow a healthy and sustainable ecosystem on the Arbitrum network. Additionally, according to the reports of Open Blocks, our incentives were less Sybiled compared to our competitors and other protocols.
Success of the Program
- We saw an increase in liquidity, gradually increasing GMX v2 TVL. This increase in TVL reflected the success of the program in attracting and retaining users within the GMX ecosystem.
- Following the incentives, we saw an upsurge in daily trading activity, user count, and the total value locked (TVL) within the protocol.
- After launching the grants program, we saw more than 22 projects building on GMX v2. The increase in the number of active users that engaged with these applications, serves as a benchmark for measuring the success of initiatives aimed at increasing the adoption and usage of GMX v2 and Arbitrum.
- An increase in community participation in the forums, collaborations, and proposals submitted by community members indicates a growth in community engagement and activity, encompassing participation in the incentives, grant applications, and governance.
- Testimonials and success stories from grant recipients and partners within the ecosystem, highlighting the influence of grants on their projects or the ecosystem at large, offer firsthand insight into the grants’ impact.
- We saw an increase in token markets on GMX, with a total of 6 new markets getting listed on GMX v2 for traders, builders and DeFi liquidity providers to engage with.
- The conception and implementation of fresh features and enhancements into the GMX protocol, informed by insights derived from grant-supported projects and collaborations, can be assessed by the count of protocol upgrades and improvements executed, as well as feedback from users and ecosystem partners.
- GMX further enhanced the user experience through continuous protocol improvements and feature enhancements like One-Click Trading, Sub-Accounts and Adaptive Funding Rates.
Conclusion:
GMX has successfully executed its incentive program, achieving notable growth in trading volume, liquidity provision, and community development. We’ve seen increased user engagement, a surge in total value locked (TVL), and numerous successful projects emerging from our grant program.
The lessons learned from this program, and the strategies we’ve cultivated, will guide our future initiatives as we continue to grow and evolve in the DeFi ecosystem.
The STIP grant program has been instrumental in driving the growth and progress of GMX v2. The multifaceted approach combining trading incentives, liquidity incentives, and grant incentives has not only boosted user engagement and activity but also significantly increased the total value locked within the protocol.
Our trading incentives led to a substantial increase in trading volume and attracted a diverse range of traders, while our liquidity incentives resulted in deeper, more stable liquidity pools. This, in turn, improved the overall trading experience for our users. Lastly, the grant incentives played a crucial role in fostering innovation and contributing to the development of the GMX ecosystem.
We express our gratitude to the Arbitrum DAO and the STIP Grants program for their support. And we look forward to continuing our journey in creating a robust, efficient, and user-friendly decentralised exchange, which simultaneously functions as a liquidity base layer for all of Arbitrum DeFi.