GMX <> Plutus Collaboration

As GMX matures, our growth will come from additional products and new traders but signficantly also from an expanding ecosystem of partners especially on Arbitrum that are building on GMX. Partners bring expanded communities, development resources and through joint efforts innovative new DeFi products allowing GMX to be introduced and used by more people.

Background:

Plutus is an Arbitrum-native governance aggregator aiming to maximize users’ liquidity and rewards while simultaneously aggregating governance behind the PLS token. Plutus’ objective is to become the de-facto Layer 2 governance blackhole for projects with veTokens. Plutus has quickly gained traction with its governance product with Dopex and JonesDAO, owning approximately 50% of all Dopex governance power. In addition, Plutus is now expanding its product line to include Vaults with GLP as the premier product.

Plutus has recently released a GLP vault as its flagship product for their Vaults product line. The product is summarized below. In short, the purpose is to give GLP stakers maximum yield with maximum convenience while creating a base-layer DeFi-lego for other protocols to build on top of.

  • GLP can be deposited to mint plvGLP at any time.

  • Exiting plvGLP is subject to a 2% fee (there’s no liquidity pool)

  • plvGLP is interest-bearing, meaning that as rewards compound over time, plvGLP will become more valuable than GLP (for example 1 plvGLP = 1.2 GLP). This makes it a prime candidate to build on.

  • esGMX rewards are locked under Plutus and automatically compounded. This results in constantly increased yields for all pool participants.

  • Plutus will take a 10% fee on GLP yield.

  • Stake plvGLP to earn PLS emissions, ensuring that yields are always higher than the native GLP pool.

For a more in-depth look at plvGLP, please refer to Plutus’ docs.

plvGLP was recently launched with a supply cap of 1M. The supply cap was met in under 2,5 hours. Plutus is looking to raise the cap in increments, specifically to 5M, 10M and 20M. The first raise will happen within a week of launch.

These supply cap increases are also accompanied by increasing the LM emissions from the current 5% of PLS LM emissions to 10-15% of total PLS LM emissions. The Plutus team sees that allocating emissions to GLP and GMX-related products solidifies GMX as an anchor governance asset for Plutus alongside Dopex and Jones.

Proposal:

In order to further solidify the collaboration between GMX and Plutus while enabling the GLP vault to receive maximal yield, we propose a $200k token swap between the teams’ treasuries.

Specifically, we are proposing to swap $200k worth of esGMX tokens for $200k worth of locked PLS tokens. The amount of tokens received will be based on a 30-day trailing average of both tokens’ prices at the time that the governance proposal passes if voted on or 15 days after being posted to the GMX forum if no vote is conducted. Pricing will be used using the daily rate from coingecko.

Plutus and GMX will stake their respective initial positions for a period of not less than [2] years but may utilize their yield including in native tokens (esGMX / PLS) as required by their protocol.

The esGMX tokens that Plutus receives will therefore never enter circulation and their yield will be used solely to incentivize the products that Plutus builds on top of GLP and potentially GMX. Similarly, the PLS tokens can be staked by the GMX team to earn yield and later down the line bribes as well, providing a future source of yield and diversification for the GMX treasury. The size of the swap was determined to be small enough to not significantly affect the treasuries of either protocol or introduce unnecessary risk, while still bringing significant benefits to the users of Plutus’ GLP vault product.

Effectively the main objective of the treasury swap is to benefit the end users of the product, which are current GLP stakers. While Plutus’ GLP product can thrive without a treasury swap, it would significantly increase yield for plvGLP stakers due to the emissions from the permanently locked and compounded esGMX while signaling the beginning of a mutually beneficial relationship between GMX and Plutus.

Action:

Complete an OTC treasury swap between the GMX and Plutus treasuries for $200k worth of locked esGMX for $200k worth of locked PLS tokens.

12 Likes

This proposal has been moved to governance voting until September 16, 2022

https://snapshot.org/#/gmx.eth/proposal/0xcf9d7c4ea618a83228e2279823c1c73c00f1a17775236c8bbdbd92a39b07d4a8

2 Likes

While I like this approach in general within the Arbitrum ecosystem, we must take into account the fact that the PLS token is entirely speculative with minimal to none value as of now. In the future the token may very well become useful to GMX but as of now it is not.

Doing something like this would be a gamble. We would give away one token which is valuable right now for a token which might be valuable in time.

My take on this proposal is to deny for now, but keep an open mind to accept this proposal in the future when it becomes clear that GMX holders does indeed benefit from having a holding of PLS tokens (eg to bribe in some way, etc).

I don’t buy the altruistic “we’re all in this together, let’s build an alliance” argument when it’s evident that, as of now, one side wins much more from this deal than the other.

9 Likes

@olof1 makes a good point. While I am a GLP staker and I do use plvGLP, the future of Plutus is not entirely clear. I do like the idea of projects supporting each other within the Arbitrum ecosystem, but I feel like having a better idea of how this benefits GMX outside of the promise of future yield would make it an easier decision. What kind of future products would be beneficial to GMX? Why would we want DPX and JONES governance power? Since the majority of their revenue is currently coming from Dopex and Jones, it would imply that we also believe in those projects and their growth. What is the APR currently on their treasury yield, what is the projected yield over the next 2 years?

4 Likes

All for it.

This should bring a long-term commitment from both teams to encourage governance voting and keep building good products together.

8 Likes

Loving the collaborative spirit :slight_smile:
2 ideas:

  1. how about we add some links in the proposal for more info about the project to facilitate our due diligence? (in addition to the plutus docs link)
  2. ideally gmx will have many good partners! how much of our firing power would we be using with this one particular partnership - and can we start small and add more later when it looks to be beneficial?
    thanks!
2 Likes

Mesky from Plutus here - appreciate the discussion so far!

A couple of thoughts below…

I’d invite everyone to consider that the proposal’s terms were drafted with a long-term collaboration in mind. We’re incredibly excited to not only build on top of GMX but further drive value to both protocol’s users through this treasury swap.

An important point for discussions when drafting this proposal was the immediate benefit for users - plvGLP and (very soon) plsGMX users will be earning higher yield if this protocol swap goes through. The yield from locked esGMX will be used to directly incentivize Plutus’ GMX-related products. Users win - and that’s really important to us.

To @olof1 - the notion that Plutus has no value right now is inaccurate. Plutus owns 53% of Dopex’s governance power, in the future likely a significant amount of Jones, Sperax and other protocols as well. As only one example: Dopex governance is very valuable and even if bribing is not live yet, I again implore you to look into the future. Don’t miss the forest for the trees.

To continue on that note, this proposal was deliberately sized in a way where risk is minimal for both protocols. Compared to the size of protocol treasuries, $200k USD poses minimal impact on the protocol’s treasuries, yet introduces immediate benefits for users while solidifying the collaboration even further.

To summarize, this proposal would…

  1. Solidify the collaboration between Plutus and GMX
  2. Drive immediate financial benefits to the users of GMX related products on Plutus
  3. Do all the above while posing negligible risk to either protocol or their treasuries

Happy to answer any and all questions that might pop up!

4 Likes

Allow it!

Arbitrum season in full swing right here! Love to see collaboration within the ecosystem among the protocols complimenting each other.

Plutus has been delivering full steam ahead during the bear market. While it may be difficult to follow everything that happens around with all the hot events around us, this is a remarkable milestone!

As of this moment 53% of Dopex governance power is owned by Plutus, Jones governance power is continuously accumulated for veJONES release and plsSPA is right around the corner for Plutus. plvGLP, a yield bearing asset, is an interesting building block for the space I’m very excited to see the protocols innovate on.

As Dopex continues to release their product suite with Atlantics, OLPs, more straddle assets, more SSOVs, rDPX v2 and Dopex <> GMX integration is on the horizon, this proposal allows GMX to take a fair chunk of governance power in their hands. Based on the current metrics this allows GMX to acquire roughly 778 veDPX for fraction of its market value.

227 (118$) PLS controls 1 veDPX (450$)

1 veDPX price = 450$ | 778 veDPX = 350k
1 PLS price = 0.52$ | 200k PLS = 104k

Excited to see what Plutus builds on top of this as they usually don’t work with loud announcements and promises but just drop it on you hot!

Plutus Dune (slight data delay due to Nitro) - PlutusDAO
Plutus Medium - PlutusDAO – Medium

Booba, groppa and yours truly,
Cadmus.

4 Likes

Hello lovely Blueberry folks! I’m Kmets from the Plutus camp. Just wanted to give you all a couple of quick thoughts on why I support this proposal:

  1. This is a fantastic way to solidify the burgeoning defi movement on Arbitrum. We must all remember that right now, defi is INCREDIBLY small and niche. Whatever we can do to formulate alliances and support our fellow protocols on Arbitrum is going to be win-win for the investors, the core teams, the Arbitrum network, and decentralized finance in general.

  2. This proposal is wildly asymmetric in the favor of GMX. And that is a good thing for both Plutus and GMX! At today’s prices, $200K worth of GMX = approx. 4,000 tokens, or 0.05% of the protocol’s circ. supply. $200K worth of PLS = approx. 400,000 tokens, or 3.69% of the current circulating supply. This is an investment for GMX that is immediately 75x in their favor in terms of protocol governance! For $200K, GMX will have an outsized say in the construction of the PLS protocol in regards to every governance decision made in the future.

  3. For Plutus, this proposal is a tradeoff of speculative growth for immediate stability. For GMX this is a tradeoff of immediate stability for very speculative growth. Both protocols stand to benefit, and for $200k, it is a relatively trivial investment that immediately has benefits for both protocols.

Hope we can all work together in the future, as both protocols want what’s best to make defi on Arbitrum the most lucrative and innovative space in all of finance. Looking forward to seeing more blueberries in the Plutus discord! :blueberries: :blueberries:

3 Likes

Let me preface this by saying I hold a stake in GMX, DPX, PLS and JONES - I am fairly familiar with them and have been an investor in these projects from close to if not their inceptions.

I agree with a few of the statements here that PLS is currently more speculative than GMX, though I disagree it has no value. Currently, the entire DPX ecosystem is driven almost entirely by inflationary rewards paid in their own tokens, this is an issue for PLS. Over a year into launch DPX holders still are not receiving any platform fees, and I find it hard to believe they are going to get institutional volume without at least a re-brand (Pepes on your actual dApp? No banks, trading desks or investment firms are going to touch that).

PLS launched as a DPX based project, it is already branching out (e.g. GMX, eventually Spearx, and more to come). I think given the size and the fact revenues will be used to incentive larger and larger investment into GMX/GLP via providing vaults it’s a low risk-medium reward play and I think it’s worth it. This looks like a win-win, GMX looks more attractive and Plutus gets to increase its breadth of services to include a currently profiting and growing product, which helps reduce their dependence on DPX to drive value.

Before I would vote for it, can we clarify where this esGMX is coming from? Also, In the PLS ecosystem, who owns the esGMX that is produced by the vaults? Users don’t get it when they withdraw and also pay withdrawal fees, does Plutus commit to never vesting any of the esGMX and purely use it to drive returns for vault users?

4 Likes

all for it, i think its a great deal for both sides.

2 Likes

Massive for both protocols. Plutus officially announcing their interest in incentivizing plsGMX is huge. This means GMX holder’s would be able to pool their tokens together to earn maximum yield through shared multiplier points and perma-locked esGMX earned from all LPs. Why is that important? Most likely for a fee, plsGMX holders will be able to exit positions as needed but have the opportunity to re-enter a plsGMX position without the loss of their multiplier points and esGMX earning them additional yield! This opens the door for liquid OG GMX holder status thanks to Plutus.

Through this proposal is exactly how the Plutus team can offer higher yield for plsGMX users than native GMX aside from PLS emissions. By swapping a portion of their treasuries, Plutus can offer an upfront additional $200k GMX yield to future plsGMX and plsGLP holders on top of their deposits. Plutus did something similar with DPX, they used some of their treasury to TWAP buy DPX to offer that DPX yield on top of plsDPX deposits to ensure plsDPX depositers will always be earning more than their deposit independently. With over 50% governance power of Dopex, it’s easy to say the product is a huge success.

As it is still early for Plutus and the Dopex eco, GMX would be swapping GMX for PLS at an extremely cheap rate. GMX treasury would accumulate PLS at an opportune time while creating incentives for another protocol to help attract more liquidity to their own protocol and create a synergistic relationship.

  • Plutus offers plsGMX holders higher yield than native GMX staking with pooled MP and esGMX via PLS emissions
  • Plutus adds their treasuries $200k GMX yield on top of plsGMX and plsGLP deposits
  • More users are incentivized to buy GMX and GLP, price of GMX goes up and more liquidity in GLP
  • Plutus continues to offer the best GMX yield through multiplier points and esGMX shared among the pool for all
  • GMX can expand on the yield they offer through their PLS holdings via bribes
  • Flywheel begins

Betting against Plutus’ value proposal as it has already accumulated >50% Dopex governance is a bet against some of the biggest brains and builders in the space that are already working on a synergistic relationship between Dopex x GMX (Liquidation free leverage positions via Atlantics).

1 Like

Your rebuttal is inaccurate or just irrelevant, eg Dopex governance is currently useless (negligible fees, no bribes, etc). Having said that – please don’t misunderstand me – I believe in both the Dopex team, the Plutus team, and the Jones team in the long run.

However!

We must assess these kinds of proposals seriously and take into consideration the enormous degree of speculation present within these three protocols. DPX just as of 2-3 weeks ago got their first big product-market-fit product live, straddles. Just 2-3 weeks ago! Other than that, you could argue that a lot of their usage comes from their hefty LM.

For Jones, decent performance, to a large degree likely due to Dopex LM on their call writing.

We need to accept this reality and treat the proposal as a business would. If GMX were my business, I would wait to see these three (promising) protocols prove themselves, start earning money and show that there is a mutual benefit here.

Otherwise, it’s all speculative! Currently there is 0 actual benefit for GMX to hold PLS tokens. There’s no way around that.

2 Likes

only $200k init bruv, send it

2 Likes

I’d be supportive of this proposal if the benefits were going back to PLS holders. Right now many of the vaults do nothing to incentivize PLS except increasing locked value for the protocol. In my opinion, a portion of the staking revenue from every vault needs to go back to PLS holders. This should be a standard for any asset we bring onto Plutus. PLS could become an extremely valuable coin if it earned from the multiple revenue streams (vaults) we support as well as having the ability to earn bribes in the future. Currently it has almost no value except potential.

Given the allocation here is small, this seems like a no-brainer investment. The time to make an investment in a promising protocol is before it has PMF and before catalysts like bribes are launched.

If PlutusDAO fails in their mission, this sucks but the investment is a small enough % of treasury that you write it off and move on with no sustained harm done to GMX protocol and holders of GMX. If Plutus succeeds in their mission, both protocols profit!

2 Likes

I am against this proposal

PLS has a $5M market cap GMX market cap is almost 100x bigger, them buying $200k GMX while we buy $200k PLS is not equal.

As others have mentioned $200k is peanuts to us but it sets a precedent for the future. GMX prides itself on not being a worthless governance token and provides real yield. Why should we then take our treasury and spend it on valueless governance tokens?

Also struggling to understand how this strengthens the partnership between GMX and PLS. PLS was born in may, it should/will act in its own self interest. Blackholes don’t have favourites.

If they want to collaborate, they can. The GMX contracts are permissionless, we don’t need to buy their tokens.

I’m for it, everything thinking in the long term

Those that are against the proposal claim either…

  1. PLS has no value, valueless governance token, earns little to no money
  2. Does not bring value to PLS holders
  3. Does not bring value to GMX/GLP

All of these can easily be rebutted if one has deeper than surface level understanding of Dopex.

For point one, I would ask myself why would the big brains at GMX bother having future collabs planned with Dopex to be directly integrated to their platform? (Atlantic Puts as Leveraged Liquidation insurance) . Also, why would OG GMX players (Tano and coinflippanda) show their support in this proposal? Worth noting GMX is not the only on-chain perp protocol lined up to integrate with Dopex’s atlantic products. Why would other builders be interested in Dopex? It’s because they know how to look forward and likely did their research on Dopex, their future products and the implications of Atlantic Puts for the entire space. Fud and wait for their products to be released if you want, but I’d DYOR before fading people that know way better than most in the space.

For point 2, goes back to my first post. PLS holders will be diluted with PLS emissions going to vaults like plsGLP, but that does not happen without attracting more GLP and GMX to Plutus vaults in the future which allows the treasury to accumulate esGMX and multiplier points to share yield with depositers. Their entire protocol is built on bringing value to PLS holders, my bet is they position themselves with the fees and earned ETH from these vaults to accumulate more productive assets or directly feed PLS holders real yield from their GMX accumulation.

For point 3, this also goes back to my first post. Plutus offering higher yields for GLP and GMX will attract more liquidity to the GMX eco. If they do acquire $200k worth of esGMX, that esGMX yield will be going directly to stakers. So if a user deposits $10k plsGLP, they will earn from their $10k deposit plus a portion of the $200k esGMX shared amongst all depositers. If Plutus outright bought $200k worth of GMX, they can still direct that yield to stakers, but GMX would be missing a huge opportunity to acquire PLS at a cheap rate when Dopex’s products are still in development. IF Dopex releases just Atlantics, that is real yield in fees being distributed to veDPX lockers. Guess who has the majority of veDPX? … Thats right, Plutus does and locking PLS earns you plsDPX which is liquid veDPX. So if GMX has $200k PLS and locked, they would be earning plsDPX (and other plsAssets), GMX would then be staking their plsDPX and earning real yield. From where? GMX itself when they integrate atlantics. That is not even considering other atlantic products and other procotols integration… or even bribes for DPX emissions.

DYOR… I’ve said too much. Point is, dont be short sighted

2 Likes

Great proposal and good to see Plutus guys actively explaining their intentions here as well. All for it :+1:t2: