GMXSOL: Provide GT rewards to LPs

Proposals
1

Background

Since the base APY for LPs is currently low, it’s difficult to achieve meaningful TVL growth. To increase LP earnings and encourage long-term liquidity provision, we plan to introduce a tiered GM/GLV reward mechanism—similar to esGMX—by distributing GT to LPs as an incentive.

Mechanism

  • LPs can withdraw freely without any lock-up.
  • LPs can claim GT at any time; GT will be minted upon claiming.
  • The longer the LPs provide liquidity, the more GT rewards they can earn. The tiered APY rewards are as follows (set as parameters and adjustable):
  1. 1 to 4 weeks → 5%
  2. 5 to 12 weeks → 10%
  3. 13 to 24 weeks → 15%
  4. 25 to 48 weeks → 20%
  5. ≥ 48 weeks → 30%

Note: LPs will not receive any GT rewards during the first week. From week 2 to week 4, they will earn GT at a 5% APY. From week 5 to week 12, the APY increases to 10%, and so on, until the LP withdraws their liquidity.

5 Likes
2

It’s definitely wise to use a tiered mechanism that incentivises long-term LP’ing, I think.

3

I think that the APY should be higher while the TVL is below 20-50 million. For example, 40-50% in the maximum version and in the first 4 weeks about 10%. Also, it is worth adding a boost depending on the amount of holding GT (VIP level) of the user

1 Like
4

I agree with stimulation based on TVL. At the moment, it’s necessary to raise the plan to 40-50%. It’s also important to consider VIP status, as the more and longer a user holds GT, the fairer it is to provide a higher % APR. Will the timer reset if the LP is only partially withdrawn or if the position is increased? And how will this recalculation occur?

1 Like
5

Will there be rewards for referrers if the referral provides liquidity in LP?

6

A partial withdrawal by LP will not reset the timer. The remaining position will retain its current timing. Any newly added liquidity will start a separate timer.

7

Mechanism Update

  • LPs can withdraw freely without any lock-up.

  • LPs can claim GT at any time; GT will be minted upon claiming.

  • Referrers of LPs will receive an additional 10% GT share, and referrers can also claim GT at any time.

  • The longer the LPs provide liquidity, the more GT rewards they can earn. The tiered APY rewards are as follows (set as parameters and adjustable):

  1. 1 to 4 weeks → 5%

  2. 5 to 12 weeks → 10%

  3. 13 to 24 weeks → 15%

  4. 25 to 48 weeks → 20%

  5. ≥ 48 weeks → 30%

When the 30-day average TVL is below 30M, the APY rewards will be increased to:

  1. 1 to 4 weeks → 10%

  2. 5 to 12 weeks → 15%

  3. 13 to 24 weeks → 25%

  4. 25 to 48 weeks → 35%

  5. ≥ 48 weeks → 50%

8

Now it looks very attractive

9

From what I’m currently seeing, I believe the GMX-Solana focus should be on attracting and incentivising traders. There’s over 5 million in GM liquidity available, while utilisation is very low - with under a million in volume over the last day, for example.

Onboarding traders is more likely to draw in additional LPs, than the other way around. Drive demand, and supply will follow.

10

Just minted out of thin air and not backed by anything? The initial promise was that GT could only be minted by paying fees to the protocol (‘pay to mint’). If GT can be minted without paying any fees, it will significantly dilute supply of GT and impact the value of tokens held by early investors (traders).

1 Like
11

I might see things a bit differently:

  1. Both LPs and traders are important. LPs contribute to the project’s revenue indirectly, but with the current TVL, it’s not enough to attract whales or support more trading markets, as liquidity would be spread too thin. This makes it hard to fully showcase the strengths of the GMX V2 model.

  2. GT rewards for LPs would also accelerate the minting cycle, which could boost market expectations for GT price growth and improve sentiment toward the TGE.