The distribution of protocol rewards as GMX tokens is officially live
This code update completes the transition from the previous model based on ETH and AVAX rewards for stakers to the new model based on GMX repurchases and distribution.
The first distributions of protocol rewards in the form of GMX tokens, rather than the customary ETH and AVAX, have taken place. GMX stakers will, from now on, receive rewards in the form of GMX only. This fundamental change follows the adoption by the GMX DAO of the proposal to recoup and distribute GMX tokens, put forth by delegate and GMX-Solana contributor Q.
Exec Summary
Protocol rewards will be shared with stakers as GMX tokens starting 30 October 2024
30% of GMX V1 fees and 27% of GMX V2 fees are allocated to reacquiring GMX tokens for subsequent distribution
Rewards for GLP, GM and GLV liquidity providers will not be affected by this change
The repurchasing process is automated, transparent and permissionless
Details of the Adopted Proposal
The proposal accepted by the GMX DAO has revised GMX’s reward distribution model. Instead of relying on distributing ETH and AVAX rewards to stakers, the new approach focuses on repurchasing GMX tokens and redistributing those. Going forward, GMX stakers will receive rewards exclusively in the form of GMX tokens.
The aim is to enhance GMX’s long-term network value, optimise the user experience for stakers, and boost the protocol’s strategic flexibility. This will be achieved while minimising unnecessary changes to the reward distribution model.
Tokenholders have the opportunity to use their earned GMX rewards in several productive ways:
Staking them on the Earn page of the dApp to benefit from compounded rewards
Providing liquidity to the high-earning GM: GMX/USD pool
Using them in other DeFi protocols in the GMX ecosystem that support GMX tokens as collateral
You can read the adopted proposal in full on Governance platform Tally: https://www.tally.xyz/gov/gmx/proposal/81921330482579592877925554009800798217173652653143694483196169672340561914053
Rewards for Liquidity Providers
GLP, GLV, and GM rewards will not be affected by this change in the staking reward distribution model. GLP liquidity providers continue to receive ETH or AVAX, depending on their preferred blockchain, and GM pool rewards continue to auto-compound into the price of the GM token itself.
The existing reward distribution share of the protocol also remains unchanged:
63% of GMX V2 fees go to GM liquidity providers
70% of GMX V1 fees go to GLP liquidity providers
10% of GMX V2 fees accrue to the treasury to fund operational expenses
30% of GMX V1 fees and 27% of GMX V2 fees are now used to reacquire GMX tokens, which are subsequently distributed to GMX stakers
Permissionless, Automated & Transparent
The process to repurchase GMX tokens is transparently automated in the smart contract code and fully permissionless. The code allows anyone to deposit GMX tokens in exchange for releasing the currently pending fees. For more details, please refer to the contracts here on GitHub.
The listed FeeHandler.sol contract manages swap fees, withdrawals, and claims, incorporating a structure for handling fees across different protocol versions (V1 and V2). Essential functions include fee withdrawal to designated receivers, fee claims from specified markets, and a buying mechanism that validates token types and amounts. The contract also emits events for tracking fee transactions and uses oracles for price data to ensure accurate token conversions.
A helpful community contributor has developed a Telegram bot to help community members keep track of the GMX BB&D process. Telegram users can follow the buys live via this channel.
Core GMX security partner Guardian Audits has performed a detailed audit of the involved code.
Connect with the GMX community:
Website: https://gmx.io/
Twitter: https://twitter.com/GMX_IO
Telegram: https://t.me/GMX_IO
Announcements: https://t.me/GMX_Announcements
Discord: https://discord.gg/H5PeQru3Aa
Github: https://github.com/gmx-io
Documentation: https://docs.gmx.io/
Disclaimer
This announcement is for informational purposes only and does not constitute legal, financial, or investment advice. GMX or any other parties make no warranties or representations regarding the accuracy, completeness, or suitability of the information presented and will not be liable for any losses, damages, or adverse consequences that may arise in relation to this announcement.
It is strongly advised to undertake your own due diligence and seek advice from relevant professionals before making decisions based on this announcement.