# GMX \<\> STFX Proposal **URL:** \ **Category:** Proposals\ **Created:** [November 10, 2022, 8:46pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020 "2022-11-10T20:46:39Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Aedran](https://avatars.discourse-cdn.com/v4/letter/a/87869e/32.png) [@Aedran](https://gov.gmx.io/u/Aedran)\ **Post date:** [November 13, 2022, 9:40am UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/22 "2022-11-13T09:40:08Z")
Strong endorsement, low-risk and win-win in expectation ---
**Author:** ![degenian](https://avatars.discourse-cdn.com/v4/letter/d/50afbb/32.png) [@degenian](https://gov.gmx.io/u/degenian)\ **Post date:** [November 13, 2022, 11:52am UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/23 "2022-11-13T11:52:57Z")
Thanks for the timely response! **\>\> Re valuation** At this nascent stage for STFX, it’s useful to look at the valuations and metrics of comparative protocols that are already established and have a track record. It’s plausible STFX will outperform those given the differences you outline but that’s theoretical at this point. 1. Maybe I missed it, but what is the public launch valuation ($40m FDV?). A way to avoid this guessing at valuation and be more confident in a fair valuation, would be to wait to do this until after public launch (which is this month anyway?) + 30 or 60 days for price to settle down and to take a VWAP + discount. Risk of paying more for reducing uncertainty is not a bad trade off from a GMX DAO perspective imo. 1. What do other DAO folk think of this? Other downsides I’m missing apart from price risk? 2. Is there any pressing reason this is being proposed before the public launch given it’s imminent? **\>\> Re perp protocol** Thank you for providing the clarity on perp protocol, that addresses my questions. Makes sense. So it’s more accurate to say STFX will initially source the majority of its liquidity from GMX, but that may change over time with future integrations, and is dependent on users **\>\> Re $100k** > We felt that a $100k swap between both projects was a good degree of alignment given our projected valuation, and would align both of our projects going forward I need something a bit more concrete than that! That’s not good rationale. Given you have identified some ways how you’ll use the income (and that esGMX income is relatively stable), I would have expected you to have a plan that would justify the income from $100k esGMX, with anticipated pass throughs to GMX etc. I’m really looking to see that you’ve thought it through in some detail vs just plucked a round figure out of the air. 1. What could you not do with the income from $50k esGMX and what more could you do with it from $200k? and how would that affect GMX? ---
**Author:** ![Bitmage](https://avatars.discourse-cdn.com/v4/letter/b/958977/32.png) [@Bitmage](https://gov.gmx.io/u/Bitmage)\ **Post date:** [November 13, 2022, 5:07pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/24 "2022-11-13T17:07:05Z")
i am new to this - where is the vote button? ---
**Author:** ![Zano](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/zano/32/162_2.png) [@Zano](https://gov.gmx.io/u/Zano)\ **Post date:** [November 14, 2022, 2:45am UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/25 "2022-11-14T02:45:35Z")
This is a Proposal, - Voting, takes place after the proposal ---
**Author:** ![STFX](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/stfx/32/240_2.png) [@STFX](https://gov.gmx.io/u/STFX)\ **Post date:** [November 14, 2022, 12:44pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/26 "2022-11-14T12:44:55Z")
Thank you all for the additional replies, we are really humbled by the engagement here and glad to be discussing with the community. Regarding some of the additional questions that have come up: > At this nascent stage for STFX, it’s useful to look at the valuations and metrics of comparative protocols that are already established and have a track record. It’s plausible STFX will outperform those given the differences you outline but that’s theoretical at this point. We agree that comparable projects are useful in analysis, but they shouldn’t be the be all and end all, especially when there is quite a differentiation in terms of product: We have a lot of conviction that the Social-Fi trading vertical is a multi-billion dollar market. Derivatives are crypto’s strongest product-market fit to date, and it’s not even close. Currently, the market is mostly driven off the back of retail traders, 99% of whom are socially trading in this format already! The primary difference is that it’s all being conducted through “soft” media channels (Discord, Telegram, Twitter) in a fragmented, non-accountable manner. We talk about this extensively in our Medium posts and Twitter spaces, so I won’t rehash it too much here, but the value potential for a platform that can aggregate these fragmented trading communities in a scalable, visible manner cannot be understated. Maybe it’s not STFX that ultimately wins this vertical, but inevitably someone will figure it out, and the value accrual will be extraordinary. > Is there any pressing reason this is being proposed before the public launch given it’s imminent? Our public launch date isn’t hardcoded; we are currently aiming for Q1 2023 but this will likely depend on market conditions to some extent. We have been going back and forth with members of the GMX community, iterating through the proposal structure since September. As our month-long Alpha mainnet is winding down Thursday, we thought it was an ideal time to make the proposal, supported by stats from the platform so far. Many of the core GMX team we’ve been working with agreed. > What could you not do with the income from $50k esGMX and what more could you do with it from $200k? and how would that affect GMX? At ~20% APR, the current suggestion of $100k gives approximately $20k in annual revenue. As touched on earlier, these funds would be primarily geared towards funding trading competitions on STFX. $20k of income from this proposal will allow us to host regular competitions for managers who host vaults on GMX, accruing value to both platforms in the process. In addition, these rewards from the esGMX will be paired alongside STFX token emissions to boost rewards further. As a result, value would pass through to GMX as it benefits from the increased trading volumes that stem from these competitions. As for why we suggest the $100k value, there were a few reasons in particular: 1. The GMX core team recommended this as a reasonable value; but also, 2. It helps align the two communities without putting material economic risk on the GMX treasury. The larger the treasury swap, the higher risk it presents in the community’s eyes; 3. As mentioned above, while $100k esGMX isn’t a war chest of yield, we think it’s enough to move the needle for competitions, especially when paired alongside STFX rewards in a way in which a smaller amount would not be; and finally, 4. $100k seemed within the standard bounds of previous treasury swap proposals. ---
**Author:** ![randomishwalk](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/randomishwalk/32/128_2.png) [@randomishwalk](https://gov.gmx.io/u/randomishwalk)\ **Post date:** [November 15, 2022, 5:00pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/27 "2022-11-15T17:00:45Z")
Interesting proposal, I do like that STFX, unlike many of the other token swap proposals that have come across, addresses the taker side (demand) rather than the maker (liquidity or supply) side. My main questions here which I have not yet seen compelling answers to are: 1. Would be very relevant for the community to know if the vocal / loud supporters of this proposal have potential conflicts of interest including investments in STFX in a personal or professional capacity. And likewise with anyone on the GMX core contributor team. 2. I’m not sure why a token swap is needed here for STFX to compose with GMX. The “economic alignment” argument doesn’t really make sense to me as a convincing reason in its own right. It’s not like a bilateral token swap is needed for an integration here to operationally work. 3. Similar to #2, why not just wait till $STFX is floated on public token markets (uni v3, etc) and then the respective SFTX and GMX treasuries can purchase each other’s tokens on open market if it makes sense. 4. GMX’s treasury should absolutely _not_ be treated as an internal VC fund. No responsible treasury should do this unless taking on that level of risk is the expressed goal of the protocol / DAO treasury in question. The fact that this practice is rampant throughout DeFi, does not mean this is a good idea. 5. From a reputational and risk to _existing business_ POV, GMX has far more to lose here than STFX. And I am not sure that mismatch in risk being exchanged here (financial and reputational) is accurately reflected in the FDV. > [@STFX](#): > > If the proposal passes, swap terms will be executed at a 30m FDV Good Will Valuation for $STFX - at 30m FDV, the swap terms are a blended valuation between seed and public launch, as a show of good-will between STFX and GMX communities, and to demonstrate intentions to cultivate productive and long term collaboration. Could you please share the valuation details on the seed and public launch token raise? Also what % of circulating supply and max supply does this proposed $ amt and valuation represent? ---
**Author:** ![STFX](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/stfx/32/240_2.png) [@STFX](https://gov.gmx.io/u/STFX)\ **Post date:** [November 16, 2022, 3:53pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/28 "2022-11-16T15:53:33Z")
Thank you for the reply @randomishwalk and the concerns raised! > Would be very relevant for the community to know if the vocal / loud supporters of this proposal have potential conflicts of interest including investments in STFX in a personal or professional capacity. And likewise with anyone on the GMX core contributor team. The list of our private round investors can be found below: [Investors & Partners - STFX Docs](https://docs.stfx.io/investors-and-partners) None of the GMX core contributor team have an existing investment in STFX. > GMX’s treasury should absolutely not be treated as an internal VC fund. No responsible treasury should do this unless taking on that level of risk is the expressed goal of the protocol / DAO treasury in question. The nature of this proposal is to align both protocols economically and visibly going forward: STFX despite being in an alpha launch stage (with $200 cap on STVs) has already provided taker volume of over $1mm on the GMX platform. We expect this figure to increase significantly over the coming months as we loosen restrictions on raise capacity. As a result, we also expect the fees provided to GMX stakers from STFX activity to increase, and believe that a token swap agreement will represent a reflexive arrangement between both protocols; we don’t envision this as a one-sided VC investment. > It’s not like a bilateral token swap is needed for an integration here to operationally work. Since we already have a GMX integration and have provided significant taker volume on the GMX platform, this proposal is less about operational alignment as it is community alignment. We intend to become a significant venue for volume to flow through the GMX platform over the coming months, and we feel that a token swap between treasuries is an consolidation of that objective. > Could you please share the valuation details on the seed and public launch token raise? STFX raised a seed round at a $20m pre-product valuation for 10% of the total supply, this raise concluded in August 2022. Currently, we are planning to raise a public round at a $40m valuation for 15% of the total supply. Though as we stated above, the exact timing and nature of this raise may be subject to change; our current plan is to raise these funds in Q1 2023. > Also what % of circulating supply and max supply does this proposed $ amt and valuation represent? The suggestion of a token swap of $100k of STFX token at $30m valuation represents 0.33% of the STFX total supply, likewise, 0.018% of the GMX total supply (relative to a current FDV of $553m). ---
**Author:** ![randomishwalk](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/randomishwalk/32/128_2.png) [@randomishwalk](https://gov.gmx.io/u/randomishwalk)\ **Post date:** [November 16, 2022, 4:07pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/29 "2022-11-16T16:07:28Z")
> [@STFX](#): > > The list of our private round investors can be found below: [Investors & Partners - STFX Docs](https://docs.stfx.io/investors-and-partners) I really appreciate the transparency. (Also sidenote, but great set of docs imo!) I was hoping more for others who have commented on this thread to self-identify so that people who don’t have time to dig through docs can easily identify the key issues and considerations 🙂 > [@STFX](#): > > None of the GMX core contributor team have an existing investment in STFX. That is good to hear, just from a conflicts standpoint. > [@STFX](#): > > As a result, we also expect the fees provided to GMX stakers from STFX activity to increase, and believe that a token swap agreement will represent a reflexive arrangement between both protocols; we don’t envision this as a one-sided VC investment. Right I totally get that. I take issue with the “reflexive” element of it as you point out. I think DeFi and crypto is naturally reflexive enough without having this potential treasury entanglement issue. But I acknowledge I am definitely on the more cautious side when it comes to risk, so I have a clear bias towards highly conservative approaches to treasury management (which thus far in the bear market has been the correct choice for DAO treasuries to make). > [@STFX](#): > > Since we already have a GMX integration and have provided significant taker volume on the GMX platform, this proposal is less about operational alignment as it is community alignment. We intend to become a significant venue for volume to flow through the GMX platform over the coming months, and we feel that a token swap between treasuries is an consolidation of that objective. Given the high overlap in your angel investor base with community leaders & users of GMX, I would argue that “community alignment” is already accomplished. I think there are far more effective ways to signal and implement community alignment that do not involve incremental treasury risk. Some ideas off the top of my head include: - Podcast appearances with builders from both ecosystems (I’d love to listen to that!) - Participating in jointly hosted Arbitrum AMA spaces which Hunter from Offchain Labs can organize & facilitate/moderate - Direct collaboration between devs and greater mutual assistance from both sides on the technical & liquidity integration front - A forked version of the canonical IPFS-hosted GMX frontend that includes more explicit STFX-enabled features - Joint development of an iOS and Android-friendly mobile app (taking inspiration from more mature “social investing and trading” apps like eToro) that on backend is powered by STFX & GMX - Joint grants to fund external risk monitoring (aka Gauntlet) and Dune dashboard contests + trading contests > [@STFX](#): > > STFX raised a seed round at a $20m pre-product valuation for 10% of the total supply, this raise concluded in August 2022. > > Currently, we are planning to raise a public round at a $40m valuation for 15% of the total supply. Though as we stated above, the exact timing and nature of this raise may be subject to change; our current plan is to raise these funds in Q1 2023. Thank you again for this disclosure and my apologies if you’ve disclosed that elsewhere (twitter, medium, etc)! > [@STFX](#): > > The suggestion of a token swap of $100k of STFX token at $30m valuation represents 0.33% of the STFX total supply, likewise, 0.018% of the GMX total supply (relative to a current FDV of $553m). Yes I fully acknowledge in terms of both $ amt and % of supply, this is not a massive financial decision–am just emphasizing that capital is incredibly valuable, especially in a bear market, and there are many (in my opinion) more compelling ways for GMX to use its treasury. ---
**Author:** ![coinflipcanda](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/coinflipcanda/32/207_2.png) [@coinflipcanda](https://gov.gmx.io/u/coinflipcanda)\ **Post date:** [November 17, 2022, 7:39am UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/30 "2022-11-17T07:39:35Z")
Update made to reserved post above > [@GMX \<\> STFX Proposal](https://gov.gmx.io/t/gmx-stfx-proposal/1020/5): > > In follow-on discussion between core contributors and STFX, we have proposed that a small change be made to better reflect the long term alignment between the protocols. The final language that goes for voting will include the below updated language. STFX and GMX intend to hold the tokens received from the swap indefinitely and keep them in their treasury. However after 2 years the protocols can mutually review and come to their governance to seek equitable adjustments in the event there has … ---
**Author:** ![randomishwalk](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/randomishwalk/32/128_2.png) [@randomishwalk](https://gov.gmx.io/u/randomishwalk)\ **Post date:** [November 17, 2022, 4:24pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/31 "2022-11-17T16:24:54Z")
Thanks. What is your opinion on the economic alignment point? I still think an outright token swap is unnecessary for _product alignment_ (which is really what matters here) and I think this is not what our treasury ought to be used for. This isn’t really “operational” or “capital-raising” in nature, which in my mind are the two roles of treasury tokens. That said, I am somewhat sympathetic to some of the points @STFX has made here and appreciate some of the additional detail / transparency provided. ---
**Author:** ![woofbark](https://avatars.discourse-cdn.com/v4/letter/w/dec6dc/32.png) [@woofbark](https://gov.gmx.io/u/woofbark)\ **Post date:** [November 18, 2022, 12:08am UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/32 "2022-11-18T00:08:07Z")
After looking at the platform I do see its potential but I do think the valuation of 30m needs to be adjusted before its given the green flag ---
**Author:** ![ImmieV](https://avatars.discourse-cdn.com/v4/letter/i/f05b48/32.png) [@ImmieV](https://gov.gmx.io/u/ImmieV)\ **Post date:** [November 18, 2022, 10:37pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/33 "2022-11-18T22:37:01Z")
Love the analysis here. ---
**Author:** ![Jonezee](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/jonezee/32/1238_2.png) [@Jonezee](https://gov.gmx.io/u/Jonezee)\ **Post date:** [November 19, 2022, 9:47pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/34 "2022-11-19T21:47:08Z")
These token swap funds would come out of GMX’s marketing fund, technically. The _“1 million GMX tokens reserved for marketing, partnerships and community developers”_, as the Gitbook describes them. So I feel this expenditure would be in line with what the funds are earmarked for. I’m sympathetic to the idea that the protocol’s capital should be allocated conservatively, that said. And some of your mentioned alternative ideas for achieving further GMX-STFX community alignment are excellent, and should be taken to heart… A joint mobile app, an STFX-features integrated front-end; I would love to see those realized. Because they would exemplify the synergistic value-add relationship between the two protocols. But that type of deep, longterm collaboration is expensive and time consuming - unlikely to materialise without first cultivating mutual faith, close contact, an aligned vision. Personally, this proposal feels to me like it helps lay the foundations for just that. ---
**Author:** ![Jonezee](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/jonezee/32/1238_2.png) [@Jonezee](https://gov.gmx.io/u/Jonezee)\ **Post date:** [November 20, 2022, 12:13pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/35 "2022-11-20T12:13:38Z")
Please note: The STFX proposal has been posted on snapshot, for voting. ---
**Author:** ![randomishwalk](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/randomishwalk/32/128_2.png) [@randomishwalk](https://gov.gmx.io/u/randomishwalk)\ **Post date:** [November 20, 2022, 2:36pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/36 "2022-11-20T14:36:09Z")
Noted, thank you for sharing your thoughts here ---
**Author:** ![juli](https://avatars.discourse-cdn.com/v4/letter/j/dfb087/32.png) [@juli](https://gov.gmx.io/u/juli)\ **Post date:** [November 21, 2022, 5:38pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/37 "2022-11-21T17:38:37Z")
This is a very good proposal, which will significantly improve the trading volume of GMX and be beneficial to the development of GMX ---
**Author:** ![ImmieV](https://avatars.discourse-cdn.com/v4/letter/i/f05b48/32.png) [@ImmieV](https://gov.gmx.io/u/ImmieV)\ **Post date:** [November 22, 2022, 3:36pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/38 "2022-11-22T15:36:20Z")
Jonezee this could be a silly question but where is Snapshot to vote? ---
**Author:** ![Jonezee](https://sea2.discourse-cdn.com/flex020/user_avatar/gov.gmx.io/jonezee/32/1238_2.png) [@Jonezee](https://gov.gmx.io/u/Jonezee)\ **Post date:** [November 22, 2022, 4:16pm UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/39 "2022-11-22T16:16:49Z")
No silly question at all, here: [https://snapshot.org/#/gmx.eth](https://snapshot.org/#/gmx.eth) ---
**Author:** ![kampl777](https://avatars.discourse-cdn.com/v4/letter/k/dbc845/32.png) [@kampl777](https://gov.gmx.io/u/kampl777)\ **Post date:** [November 23, 2022, 3:32am UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/40 "2022-11-23T03:32:00Z")
This is a Proposal, - Voting, takes place after the proposal ---
**Author:** ![fonk](https://avatars.discourse-cdn.com/v4/letter/f/45deac/32.png) [@fonk](https://gov.gmx.io/u/fonk)\ **Post date:** [November 23, 2022, 8:01am UTC](https://gov.gmx.io/t/gmx-stfx-proposal/1020/41 "2022-11-23T08:01:43Z")
I support this proposal, a different interface for volume adding is a huge catalyst [Previous page](https://gov.gmx.io/t/gmx-stfx-proposal/1020.md?page=1) [Next page](https://gov.gmx.io/t/gmx-stfx-proposal/1020.md?page=3)