GMX: Transition from “Buyback ETH and Distribute ETH” to “Buyback GMX and Distribute GMX”

Proposals
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In response to the proposal for Buyback GMX and Distribute GMX, Vaultka team supports this idea with the following reasons:

  1. Positive impact on $GMX price growth in long run
  • To support healthy price growth, it is vital to have a buyback feature that creates consistent buying pressure for GMX tokens instead of minting new ones. Utilizing the ETH reward for GMX buybacks could have a positive long-term impact on GMX’s price. Considering that GMX consistently generates over $10 million in fees annually, the buyback could significantly and positively affect GMX’s price.
  1. Users get exposure on $GMX tokens
  • Users can get exposure on $GMX tokens directly under the option for buyback GMX and increase their potential return when the GMX token steps into its bull run. On the other hand, users have another choice to receive ETH rewards based on their risk preferences.
  1. increases the exposure of $GMX in the open market
  • In a certain extent, maintaining a consistent purchasing volume can enhance exposure and attract new potential buyers to participate in the GMX ecosystem.

Suggestions

  1. Use “Convert ETH to GMX” for Option 2
  • We have noticed some comments about the option to “Convert ETH to GMX” instead of “Convert GMX to ETH.” Some users feel that this wording implies that there are extra fees involved in converting GMX back to ETH, which could be inconvenient for those who prefer to receive ETH rewards only. Similarly, we have introduced a VKA buyback option, allowing users to choose to convert their USDC reward to VKA via Uniswap, or receive the USDC reward directly.
  1. Utilize Swap Aggregators for buyback
  • Given that there’s $1.01m liquidity for $GMX in its native pool on GMX, the high volume conversion of ETH to GMX might affect the amount of potential reward to users negatively due to fees and limited liquidity, which leads to dissatisfaction from them. To optimize this solution, we suggest utilizing Swap Aggregators as part of the buyback mechanism, in which, it can achieve the effect of reducing GMX’s circulating supply in the open market.
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