When GMX was formed, the community established a distribution that included an allocation of 250,000 tokens to contributors over the first two years reflecting ~1.9% of the total token supply of GMX tokens. These tokens were distributed linearly over that period.
Milestones
During that period, GMX has crossed numerous significant milestones:
successful deployment to Ethereum L2, Arbitrum One
formalizing community governance including discussion forums, snapshot voting, implementation of multi-sigs, and the use of Labs
expanding the contributor base to support growth
successful deployment to a second EVM chain, Avalanche, and securing a $4,000,000 grant for scaling activity there
becoming the largest native DeFi protocol on Arbitrum measured by TVL, Volume, and on-chain activity
continued iteration on the GMX V1 (GLP)
removal of time to hold requirements on position close
development and deployment of hybrid oracles for low latency pricing
two transaction methods, significantly reducing Oracle extractable value
on-chain referral and trader rebates
dynamic open interest caps to limit open interest skew
multiple safety, security, and stability updates to ensure the health of the protocol
marketing and messaging that has maintained through contributors and community an active presence for GMX in discussions of leading protocols, thought leaders, and preferred development partner
establish key relationships across the Arbitrum, Avalanche, and DeFi ecosystems, making GMX trading, referrals, and GLP, an integral protocol for users and other protocols/DAOs
GMX V2
Development and beta release of GMX V2 which has developed out of the strategic guidance of the community on formulating protocol development (X4: Protocol-Controlled Exchange - GMX News) under a BSL license (Snapshot) for the benefit of the GMX DAO.
a code base developed over the last year
jointly contributing to the development and the launch partner of a new flagship low latency Oracle by industry leader Chainlink, creating greater decentralization and economic security for the protocol
$2,000,000 committed/funded for third-party expenditure towards risk and safety including
audits during design and development conducted by four distinct firms: ABDK, DeDaub, Guardian, and Sherlock.
economic risk analysis by Chaos Labs in the design and deployment
contributor firms brought on board for threat detection, incident response, and web2/3 penetration testing to support post-launch
Utilization of Tokens
Contributor tokens have helped to secure the commitment of contributors supporting the development of the protocols under the GMX banner despite limited funds (in stables and ETH) in the treasury when the community formed the DAO.
Compared to many protocols and DAOs that have kept a large token supply for their contributors, founders, and teams the approach at our inception and ever since was very different including having no founders or teams but instead the community self-governing and bringing in contributors from that community with a limited initial runway to help grow this decentralized organization and the protocols under it. It was about leveraging this diverse group of community, contributors, and partners growing GMX.
Over the last two years, tokens and fees have been directed towards supporting all participants:
1.46 million tokens for the community (GMX staking rewards) + 30% of protocol fees
1.40 million tokens liquidity incentives (GLP staking rewards) + 70% of protocol fees
0.25 million tokens on development, marketing & security (bonding, swaps, referrals)
0.25 million tokens to contributors
What is being asked for?
“Labs” (Snapshot) is seeking support for an allocation of 250k GMX over the next two years from the ~0.75 million tokens remaining in the integration incentives and community developers allocation of the tokenomics and overall ~2.00 million available in the treasury towards Contributor Tokens. Such amounts drawn in the same manner as the original two-year allocation
There is no proposed change to the hard cap which remains 13.25 million GMX
these distributions to Labs remain subject to governance, with future distributions terminatable if governance determines that such payments no longer support their requirements
Labs commit to an orderly handover to other contributors, and community members if so desired by governance, if such an arrangement does not continue at any time.
coinciding with the two-year mark and the launch of V2, a treasury growth plan (Snapshot ) was passed, there is a possibility that over time as this becomes a more stable source of funding that this be considered to partially or fully fund contributions to the protocol.
What does GMX gain?
the contributors have never maintained a roadmap for the protocol, instead taking guidance and where possible providing support for tasks identified as priorities; contributors and Labs intend to continue to try to support such priorities including those related to V2
Labs will continue to present ideas of interest to governance and continue to coordinate technical contributors in relation to the upkeep, development, and good functioning of the existing protocol
this commitment of contributor tokens over the next two years will allow Labs the stability to secure and retain long-term contributors who have provided meaningful contributions to the growth of GMX
Forum Discussion / Snapshot Voting
before progressing to a snapshot, we seek feedback on this proposal, alternate proposals, and/or improvements. Depending on the final nature of the discussion a proposal may be put up with a For, Against vote or multiple options evaluated via ranked choice
Thank you for providing a breakdown on how tokens have been allocated/spent so far, it’s refreshing to see that in spite of GMX’s success allocations haven’t been frivolously spent.
I would be happy to support such a proposal should it ensure to continue successful development of GMX up to the point where flow to the treasury under the v2 fee structure could self sustain the protocol.
Here’s to another successful two years and beyond
I am in favor of the proposal to continue aligning Labs contributor compensation with the token, and starting to institute a reasonable, sustainable ongoing development budget. Protocols should be able to use their currency as fuel for growth, whether that’s for strategic partners or for recruiting and retaining talent, just like any equity-capitalized business.
That said, I do have two issues to bring up:
Budget clarification: it’s important to note this token allocation is in addition to the previously set out fee allocation. As I have asked for before, any clarification around historical contributor expenses/compensation, or even the exact number and roles of contributors, would be helpful for judging how reasonable this proposal is. Gmx v2: sustainable development - #18 by mistapie
Vesting requirements: I think this allocation should be converted to and distributed as esGMX.
love this overall - big picture, strategic ownership is critical and GMX has always been behind other leading projects. Locking in talent and growing team is important for next couple years of success.
Also would be great to see more details on how much being allocated where and what mechanisms being used to do so
Just want to add couple of comments for the issues mentioned.
The allocation previously set out for fees from V2 is 10% for Treasury includes Chainlink payouts, operation costs like Oracles, Keepers, legal reserve, grants, risk committee, immuenfi etc as well not just for funding payroll for contributors in future. This is just started and there is very limited amount of money there to even consider this as a primary source to fund contributor pay or incentives. As proposal also talks about this could be potentially be a future primary source of payroll if it indeed becomes a significant bucket and the DAO has the power to make that switch.
Regarding Vesting requirements I strongly disagree. The amount of tokens being asked is very reasonable 1.9% of entire supply which is to be distributed linearly over 2 years. It is not all being lumpsome distributed at once, which if it was then it makes sense to do that as esgmx and vest over additional period. This is a better way to do it because it is spread over linearly and the team itself changes and evolves over time that way tokens are spent carefully over time so that allows for contributors to be expanded or contracted.
Less than 4% of supply over 4 years for building and maintaining an incredible project like GMX is already incredibly rare thing in any industry.
Saying all that I do agree with your points about getting more details around this process.
This is an exciting proposal, and I’ll support it all through.
A Question, tho,
How will the distribution of these tokens be managed to ensure they are allocated to contributors actively contributing to the protocol’s development and success?
Are there any mechanisms to prevent potential misuse or mismanagement of the allocated tokens?
Agree with Kal that this feels like a reasonable ask to compensate all the involved contributors. A lot of people have been putting their heart, soul, and endless hours into this.
Less than 4% of supply over 4 years for building and maintaining an incredible project like GMX is already incredibly rare thing in any industry.
The fee allocation mentioned goes to the GMX treasury and its governance will decide to allocate these including towards development purposes, distributions or other things they deem, this has not been allocated to contributors, other than the 1.2% of V2 revenue towards Chainlink as the protocols data provider.
Contributor expenses / contribution: for multiple reasons including individual safety of the contributors the proposal has been presented in this manner without breakdowns of individual contributors. Labs is a service provider and governance have the power to stop or modify emissions of said tokens if Labs and the contributors thru it are no longer performing in way that meets the protocols needs.
The request is for GMX tokens because distributions themselves are vested meaning that a contributor who is here over potentially the next two years will receive distributions over time and those that leave will no longer receive tokens negating the need to utilize a vesting or clawback etc
Labs and contributors make the determination of how it expends resources towards supporting its own efforts for GMX. Determining if the amounts paid are value for the protocol is for governance to determine. In this proposal have sought to make sure while proposing this grant that it be clear that contributors and Labs have no entitlement to such distributions unless governance determines so. GMX has and always should be a community led protocol.
Tokens are drawn on a monthly basis, no large lump sums exist for gross misuse. Tokens to contributors create alignment, so there isn’t an incentive to not aim for effective management. There cannot be a guarantee of mismanagement, but if there is ever a deficiency actual or perceived there is direct access to contributors (are tagged with various admin titles in the telegram so they are easy to identify and DM) with this feedback and also governance forums are always available for a more public approach.
Totally deserved and supportive to this. The contributors have followed community feedback and helped evolving the protocol in a timely manner.
Given the upcoming planned expansions with X4, new pairs, CL Oracle, would be great if some funds are also allocated to growing the contributors team to scale and fasten development. I would also be supportive to have additional funds allocated to this
