Hello,
After giving it some thought. Here’s my hot take.
SUMMARY:
This is an amazing opportunity and appreciate FTX coming forward with this. We should: (1) collaborate with them in a deal that is mutually beneficial; (2) have a contractual agreement, reviewed by a lawyer between FTX and the DAO; (3) encourage FTX to increase it’s participation level by providing liquidity and market-making expertise in addition to their currently proposed marketing campaign.
PROS:
- Great exposure and marketing potential. Having Gisele Bundchen put a blueberry in her twitter @ is worth prolly 250k USD/day.
- Bringing new users to GMX. I think the CEX->DEX funnel is a good one
- Increase in arb bots and market making (fund floor fees)
CONS/RISKS
- Not your keys, not your coins: Although GMX might control the account with the liquidity, at the end of the day, it’s still on Sam’s servers.
- Regulatory attention: If GMX is in the crosshairs for a reason or another, I unfortunately expect Sam to side with Regulators over DAOs. His business depends on it.
- Is GMX getting enough?
We have negotiation power as one of the leading DAOs, with a tight-knit community. One of the biggest problems of kickstarting a token is the liquidity provision. FTX could help out with that in some shape or form. Pretty sure they got a few tokens. Also, it’s my understanding the fees will go to them? They will be making money on our capital and this should be considered in the deal.
They were ready to drop 25m on Voyager. They could help can help the #1 DeFi protocol more than that, especially now that Alabama is moving his business on-chain…
IMO, FTX needs more skin in the game.
GENERAL COMMENTS
Perps:
I honestly think listing perps would not be that bad. The VST vault for GMX collateral is almost empty so there is no one to liquidate on-chain. Also, people hold GMX for the fees and the multiplier points. Lower GMX price = higher %APR for the week. Hard to make diamond hand community dump their coins.
However, if it really is a concern, contract should stipulate that PERP addition is contingent on gov.gmx proposal and snapshot vote with given terms and conditions.
Eventually, GMX derivatives will exist whether permissioned or not. I personally think the token is ready for it.
Sharks:
Crypto is full of sharks. Sam isn’t the first shark to lurk around GMX and he won’t be the last. Nothing wrong with this in itself, but we just have to make sure we are getting a good deal on our end and the community’s interest are pushed forward in a secure way.
Lawyer:
DAO should pay for protection. Have a formal deal, in paper.
Binance/other exchanges in the future:
Other organizations will come and ask for similar deals now that the doors has been opened to sharing the protocol’s liquidity. Perhaps 10% would be better?
CONCLUSION
There is a way to make this relationship more mutually benificial than what it is in it’s current state. I thank the core team for their hard work and the rest of the GMX community for their inputs.
EP