I think we can start with any more or less reasonable numbers at this point (10% seems good enough imho), because it will be anyway blind guessing mostly… as we don’t know exact performance for V2. And these 10% can be as big as TOOMUCH and same probability can be as low as NOTENOUGH.
And my primary point in this message is just to remind that all these parameters is not “set in stone” thing. We, as a DAO, can always re-evaluate things and make adjustments.
So, my second idea here is - what do you think about introducing some kind of term-based approach for re-evaluating\discussing fundamental parameters of whole protocol?
For an example, this term can be QUARTERLY or HALF_a_YEAR or even YEAR…
When term is running out we can see that a-ha! 10% seems TOOMUCH really… and lets cut it for next term or vice versa - if de-facto we observe that 10% not enough - we can raise it up for next term …
In my opinion, people don’t have strong objections to the 10% allocation itself. Some very constructive responses include @Saulius asking the GMX Team to provide a clear account of how the GMX Treasury has been used in the past, and @jaoda expressing concerns and focusing on the specific use of the GMX Treasury in the future. If the GMX Team can provide satisfactory answers to the questions raised, especially those listed by @Saulius, people will naturally have more confidence and clarity in the future prospects of the project.
There are certain risks in keeping a lot of cash in the GMX Treasury. Cash attracts hackers and regulators. Probably, we should hold cash for at most 3 years of runway. So, maybe, 5% fees allocation would be optimal.
Anyway, in order to decide this, let’s look at the numbers @coinflipcanda
@jaoda has a very strong point about regulatory regimes. There should not be more cash kept in the treasury than is needed. Please provide information about current spend, budget for what you all would like to spend for the next year, and then we can figure out a % allocation from there. 10% says to me that there wasn’t enough thought put into the budgeting and planning. This is coming from a 7 figure $ holder of GMX. Thanks.
Will point you back to this response, the 10% is in no way seeking or intending to spend 10% of the protocol fees on development. It is a proposal to allocate funds towards the DAO so that it can over time start spending or reserving funds for uses. Would a request for financial support of development occur? yes, but that’s not what this proposal does.
On this point, I’d love to start the conversation for how Messari could provide financial reporting services for the DAO. We’ve handled the reporting for a number of top DeFi protocols (dYdX, Synthetix, Osmosis) and would be keen to work on something similar for GMX.
will fees be converted in treasury to diversify etc?
The dao can and should consider treasury diversification, but how the Dao which is self governing decides to do so, or if it wants to appoint people to manage that process is a follow-on step once the treasury has the resources to do so
what is the current composite of the treasury assets?
The current treasury outside of our POL is mainly held in stables with some ETH and GLP. The DAO having never been backed with VC or external funds has largely been building resources to cover the backing of its immunify bounty program with Labs working to secure a development runway.
what’s the current run rate look like?
Will provide this update in the coming weeks, and this would form part of any request to allocate funds from V2 towards development.
It’s possible many here are missing a key point I want to underscore…
The 10% allocation is not vanishing into thin air or pre-earmarked immutably. it will be allocated as seen fit by the DAO, which includes funding the Labs entity/team for continued development AND potentially capital allocation (I am in favor of buybacks with any excess capital after expenses and accruing a reserve, as previously mentioned).
Great discussion here, particularly the comments from @jaoda and others around transparency and accountability. It seems to echo the discussion around ARB’s AIP-1 debacle, reflecting a maturing DAO structure that moves beyond decentralization as mere window dressing.
I’d love to see that discussion continue and hopefully lead to its own proposal, as I believe true decentralization is a launchpad for sustainable innovation. There’s a valid point, however, that these funds are not being allocated to anything and will remain under DAO control. I think the 10% proposal should go forward while the accountability discussion continues.
I support this proposal but with the addition of the time check as suggested by @russiamanbit. I’d suggest the proposal includes a mandatory re-vote 3 months after v2 launch and every 6 months thereafter. I’m hopeful a transparency/reporting proposal could be brought forward in the interim. Optimally, the reporting and time checks would work in tandem allowing the DAO to make well informed decisions.
Agree that this is a necessary change, it makes sense to allocate funds to maintain and build GMX.
I agree with others in this forum around ensuring that these funds are used transparently. While it may not be feasible to outline exactly where these funds would be allocated at this time, I think that it would be useful for GMX contributors to outline why 10% was the percentage that they landed on.
It’s great to hear that you’re enthusiastic about the establishment of a framework for allocating protocol fees in the GMX ecosystem. Involving the community in decision-making processes is indeed an effective way to ensure that the fees are allocated in a manner that benefits everyone.
Furthermore, it’s worth exploring potential collaborations with leading asset management protocols like DefiEdge. Leveraging Our expertise in automated liquidity optimization (ALO) solutions can enhance GMX’s asset management capabilities and provide users with advanced tools and strategies.
Integrating with DefiEdge would allow GMX to offer optimized asset allocation, improved risk management, and potentially higher returns for its users. By incorporating DefiEdge’s ALO solutions, GMX can efficiently manage liquidity across various assets and pools, maximizing the potential benefits for its users.
It is great to implement this, and it means a lot for the ecosystem, building more token growth and also good for defi protocols that are also looking for more sustainable growth and are inching towards growth.
We would like to contribute to this community growth and pitch our ALO, where the pool management can be streamlined for you and will attract more community and make you focus more on the protocol growth.
Thanks @coinflipcanda - agreed on the need to build out the GMX Treasury. How the Treasury is funded needs to be discussed further.
Also in full agreement with @jaoda. I’m happy to help build out the answers and ensure we implement more hurdles and expectations for the revenue to the treasury to ensure an optimal trade-off between GLP holders and long-term GMX development. Let me know if you want to have a jam session.
This is quite important for the ecosystem and I hope to help support finding the best V0.1 to propose to the community.
It makes complete sense. I am not sure how many Dev’s are actively participating however the additional support would I am sure be appreciated by the Dev team for testing, safety, and speed at delivering changes to the market.
