The GMX DAO currently holds outstanding pool fees amounting to 994.70 ETH (3.2m USD) and 69,132.83 GMX (1.6m USD) from its GMX/ETH Uniswap LP position. This proposal seeks to authorize GMX DAO to collect these outstanding position fees from Uniswap and redeploy them in a manner that strengthens token liquidity on CEXs and GMX, along with improving protocol liquidity for the wide selection of assets that GLV now supports.
DAO Custody of POL
Move twenty-one protocol-owned liquidity NFTs into a DAO Timelock Contract to consolidate fee collection, minimizing custody and security risks.
Simultaneously, a solution will be explored and implemented to bring protocol-controlled liquidity under the DAOâs governance, ensuring long-term sustainability and direct alignment with DAO objectives.
This strategy aims to optimize the utilization of these funds to drive sustainable growth, liquidity, and token utility within the GMX ecosystem.
Motivation
Maximize Value from Outstanding Fees: The outstanding fees from Uniswap represent untapped value that can be leveraged for ecosystem growth.
Strengthen Liquidity and Market Dynamics: Reallocating a portion to market-making on CEXs and GMX ensures tighter spreads, better price discovery, and a seamless trading experience, with wider availability of the GMX token
Enhance Incentives for Participants: Depositing into GLV Vaults boosts trading UX, engagement, and adoption.
Reinforce Ecosystem Sustainability: Strategic fund allocation supports GMXâs long-term goals of scalability, security, and community growth.
Specification
Fee Collection Process:
Initiate a request to Uniswap to collect the outstanding position fees.
Ensure transparency by providing well-documented reporting.
Liquidity enhancement on CEXs, administered by Labs under existing approvals
35k GMX
Up to 350 ETH (to be converted to USDT)
Enhance market liquidity for GMX in gmGMXUSDC market
35k GMX
250 ETH (to be converted to USDC)
Improve GLV liquidity
400 ETH
Amounts above are approximate and approval is sought, based on actual fees claimed, to adjust these by ± 10% to ensure full redeployment of funds
Governance Oversight:
Establish a multi-signature wallet for the funds, managed by the DAO.
Publish a report on fund utilization and its impact on liquidity, trading volume, and user engagement.
Implementation Timeline:
Finalize fee collection process with Uniswap.
Transfer NFTâs to the DAO Timelock Contract.
Allocate funds as per the strategy and initiate MM and GLV vault and GM Pools deposits.
Monitor, report, and refine the strategy based on performance metrics.
Conclusion
This proposal improves liquidity and allows the DAO to redeploy a portion of the POL (collected fees) into enhancing liquidity for GMX and the protocol.
We urge the DAO to approve this proposal, enabling the community to unlock and utilize these valuable resources effectively.
Voting Options:
Approve: Collect fees and implement the outlined allocation strategy.
More GLV looks like more opportunities for additional tokens to be listed and attracting traders. We should take these fees immediately and get the ball rolling.
Definitely great move, allowing us to use the funds we have gathered who arenât currently being used.
Having deeper liquidity for GMX in consideration of the GMX Solana launch will definitely help the protocol and pricing for GMX during these conditions.
I believe this is very important for enhancing GMXâs liquidity while also making full use of idle funds. During this process, it is essential to maintain maximum transparency to facilitate community oversight.
forgive me, but what would a market making strategy for GMX on CEXs look like, what are the âexisting approvalsâ referred to, and through which partner or entity will this strategy be executed? thanks
definitely voting yes for this
improve liquidity, to grow the market for traders, for more fees for GMX
increase revenue for the DAO, lets make the capital more efficient and positive income for the DAO.
Using our POL is a good idea, but I donât want any of it on CEX where it will be Goxxed or FTXâd.
What about splitting the POL 50/50 between GLV-BTC and GLV-ETH?
If we make a ETH-backed GMX pool, allocation via GLV-ETH will automatically adjust according to market conditions.
The fees earned by the POL could then be split 50/50, with half used to grow POL and half used to provide incentives to all other GLV investors. So as POL grows, the incentives grow too.
Essentially, itâs a way to ensure thereâs always enough buying and selling activity to support the GMX market on CEXs, just as is done via AMMs on Arbitrum and Avalanche
The existing approvals mentioned refer to the permissions given to Labs when it was established and the further decisions taken at the time of the FTX listing. At the time of FTXâs listing, a proposal was made to allocate a portion of the treasury to market-making efforts on CEXs. After FTXâs closure, these agreements were slowely unwound or suspended, and support for CEX market-making ended.
This new proposal is seeking to re-ratify the ability to continue these programs, which would involve resuming those existing liquidity provision agreements on CEXs.
