Currently also following Saulius here.
I appreciate what you guys are building, but currently, I don’t see any incentivization to boost your vault APRs with the esGMX swap, as I think GLP liquidity is in a very good spot right now as revenues are still increasing and APRs seem to increase week after week thus creating a positive feedback loop to increase OI and liquidity even more on the native GLP pools.
Hey Tano - big fan
I think the opportunity of a delta neutral vault could increase the TVL by an order of magnitude and this would lead to a direct increase in fee generation.
We appreciate the treasury swap GMX has done with UMAMI and we just want to operate on a level playing field as them. Both our products offer delta neutral GLP performance - I hope that the GMX DAO will continue to be credibly neutral.
Hey, sir thanks for the response.
If the esGMX is used for delta-neutral GLP strategies, I’m all up for it.
The issue I mostly have is, and I’m very sorry for calling it like this (can’t seem to find another word), parasiting of the GLP liquidity for your perpetual swaps on your own products.
If there was a clear distinction between GLP liquidity for delta neutral strategies and the perpetual swaps I would be in favor of voting.
Thanks for clarifying
The esGMX is ONLY used for the delta neutral GLP vault.
Our recycled liquidity vaults will not recieve any esGMX
Alright,
I think this should be more communicated in the main post as well,
in that case, I’m in favor of the proposal.
Thanks @Tano and @noodles for the clarifications.
As @Tano states, if this esGMX is to be siloed in the delta neutral vault and does not add to the liquidity available for ETH-USD perp on Rage Trade, there should be no opposition.
I think it is difficult for the wider community to form an opinion when there is nothing documented on Rage Trade Delta Neutral vaults - only the 80/20 GLP vault.
Lastly, any clues as to the tokenomics surrounding the RAGE token would also help to alleviate GMX holders concerns - for example that there will be fee-sharing from protocol revenue etc.
A successful delta-neutral vault would be incredibly valuable to the ecosystem, and allow GLP to grow at an even faster pace.
There has been some concern raised that this proposed vault would continue to reward GLP holders with nothing for GMX holders (GLP rewards have already been increased previously). I would caveat that with the fact that GMX gains its value from the depth of liquidity available in GLP. Remember a 10x in GLP depth and 10x in fees will bring much more value to GMX than to GLP due to its limited supply - we will likely see GLP and GMX market cap grow with each other from here on out, so any opportunity to increase GLP significantly should not be dismissed.
@noodles thank you for clarfying this to our community and we probably should have made it more explicit in the proposal.
Making GLP long term more integrated within the Arbitrum and Avalanche ecosystems supports deep liquidity for the GMX platform and potentially future use cases that we have for GLP.
We should also reflect that we are currently providing up to 50,000 esGMX monthly (2.0-2.5m) in incentives to liquidity providers and the more use cases and wider our adoption the less reliant we become on these incentives to keep growing GLP.
These treasury swaps incentivizing vaults and other integrations are potentially a much cheaper way to build out adoption.
Thanks @coinflipcanda for also clarifying the esGMX emissions part, which is something that is generally overlooked when talking about GLP liquidity.
The more we can focus on real-yield and only use esGMX to boost initial deployments of new products the better.
Not a bad idea if modalaities and check control has taken into consideration between the two parties that can make a set objective.
Thanks for the thoughtful response @Atomist
Got to be a no from me too. Would prefer to observe how the DN vaults perform over a moderate period of time beforehand.
Hard to find a value add here and hope I wont have to part with some of my GMX if this goes ahead.
I am open to that - if the same were to apply to competing delta neutral vaults that have participated in esGMX swaps.
We just hope for credible neutrality + a leveled playing field.
Hate to break it too you, DeFi is, and always has been, decentralized.
Dao’s enable the protocol owners to make prudential decisions regarding value.
The “You need to give us the same as you gave them” mentality simply does not apply here.
The decision has to be made by a community, and they will make that decision on their own individual accord and not the biases of a single person or entity.
I think Rage’s value is clear. We have also demonstrated competency in building our products (which are currently live on mainnet).
As far as “You need to give us the same as you gave them” - I think we should be on a level playing field because we are equally as competent in building products (not for any other reason).
It seems in your view we bring less value than other delta neutral vault creators. If so why do you believe that?
I believe you would be better served demonstrating that value by allowing the DN vault to play out for a moderate period of time first. This would instill trust in the GMX community.
Perhaps your proposal would be better received over at Mycelium?
Absolutely correct that every token holder should make their own decision. To be fair to the team from rage.trade the decision to size the swap similarly to umami was a recommendation from the partnerships and marketing side of GMX.
An esGMX sizing similar to Umami allowed us to support an additional player looking at building a delta neutral vault on GMX, but with a different composition and a clear path to market for this product.
Wow what a heated discussion. It is great to see governance so vibrant and passionate.
Here is my 2 cents about this.
One of the cool things about GMX is the attitude the core team embodies about Defi applications and how passionate they are about building composable solutions which can be integrated across Defi and ultimately multiplying the benefits for users and ecosystem in the long term. The idea that by being open and doing active partnerships we can collectively benefit and move forward is really powerful instead of being afraid and closed like traditional web2 space. We already have seen some incredible long term partnerships because of this attitude and also receive a great amount of good-will and are greatly respected in the space.
Regarding specific to this deal, I have to admit I was originally also a skeptic about RAGE and saw them as competition and also the original post was not clear how and where they would use the esGMX which put me off and couldn’t see the value add.
But after reading more, I see that esGMX will be only used for bootstrapping Delta neutral vaults for GLP. We saw with umami how popular DN vaults are and there is great appetite for it especially during these crazy volatile and uncertain times. DN vaults also are a nice entry into crypto for retail. I think it does add great value for GMX ecosystem and drive more liquidity and we should encourage multiple different DN solutions in the market. We did this exactly with umami and it is only fair to offer the same to others who are capable and build on it. Rage team seems to be competent and I heard they have been in talks with our core team in this specific regard so I also trust their judgement in this front.
Saying that I do request Rage team provide much more details about the DN vaults and how they achieve this, there is not much documentation on this front. Also have they done any tests with their strategy, how effective is it so far etc. Sharing all this information would strengthen their case that they are indeed very serious about this and have made significant investment in designing and implementing this solution on top of GLP.
For me all this is going in the right direction. Make GMX a key lego brick and deeply engrain into DEFI ecosystem with tons of partnerships and integrations!!! LFG
@noodles first of all thank you for the proposal and your ongoing feedback in this thread.
I would love to see you build delta-neutral strategies on top of GLP and believe a treasury swap is a good way to support that.
Seeing some resistance to the proposal, I would like to find a middle ground in order to come to an agreement.
There have been discussions around challenges in evaluating the delta-neutral strategies at the moment vs providing a level playing field.
What if we do the treasury swap milestone-based?
You’ll get a share of the total 5k esGMX at the beginning to incentivize vault deposits. By reaching pre-defined milestones (likely the moving average of vault TVL), the rest of the esGMX will be swapped for RAGE.
This allows Rage to keep the “bonus APR” for vault depositors constant with increasing TVL. GMX holders have lower perceived risk as part of the esGMX is swapped only after the delta-neutral strategies have shown to perform well.
Also, as Umami’s delta-neutral vault is currently closed, there isn’t direct competition and therefore limited risk of putting Rage at a disadvantage from the beginning.
Looking forward to everyone’s feedback.
Have to agree with the majority here. GMX cannot simply hand over tokens on Rage Trades word. There is very little documentation and still, the behaviour of the rage team member toward relevant questions only signals suspicions.
Launch the vault first, show us that it works, then let’s reconsider if this is appropriate.