[Modified] Proposal to authorize buybacks for points program to improve Open Interest

Proposals
1

This proposal seeks DAO approval to:

An Amendment to this proposal has been posted below:

Modified the following

  1. Execute purchases via TWAP-style execution using:
  2. 416,666 USD per month into buyback bot (Modified version if the current one does not accept passing of funds)
  3. For 12 months accounting to 5M buybacks to be earmarked and only used for a Points Program / Trading Incentives to Boost up Open Interest.

The reason for the Proposal:

  • Counter the negative flywheel of lower OI → lower fees → lower LP returns → lower liquidity.

Market execution risk: If the DAO were to buy back GMX in a single large clip or in a predictable pattern, it would be easy to frontrun or push price against the DAO, resulting in inefficient treasury usage.

Conclusion: TWAP buybacks and earmark funds to be used for Points / Trading incentive to stimulate trading on GMX. Short term solution while dev works on improving fee’s structure and referral / staking discount for traders.

If passed, the DAO approves:

  1. Creation of modified buyback contract (if current one does not allow us to send it funds for buyback)
  2. Monthly TWAP of 416,666 USD over 12 months total of 5m.
  3. Requirement for monthly reporting and a final report.

This proposal do not require any dev time with exception of buyback bot modification, and just require an additional Tally Vote to proceed. Thus I see this as a short-term measure to stop downward OI drops.

Open to additional feedback below and adjust accordingly, if not vote will be posted on Snapshot on 19th November 2025 if the proposal do not receive any strong objections.

Refer to the link above for more calculations and explanation.

Format of vote: Yes to proposal / No to reject proposal

1 Like
2

hi @0xjunwei, thank you for creating this post, i don’t have an objection to this, my main concern is just whether we would be certain that the 2-3 people selected for this multisig would use the funds as intended, as $5m is quite a large amount

perhaps we could use something like Create Payment Streams | Sablier so that the amount in custody by the multisig is not very large at any point in time

4 Likes
3

I think I know enough people in GMX contributors that holds strong integrity and morale. As a safeguard those in treasury should be okay with their identities with legal documentation.

I’m more concerned how to have the buyback without alerting the public to frontrun the buybacks :slight_smile:

2 Likes
4

Hey @xdev_10 i agree with you thus the rationale of only allowing limit orders through gmx and uniswap where we could create a smart contract to only allow calling of those functions. With regards to binance, my idea would be someone purchase it from binance first and trade it with the multi sig at face value / similar to an otc we can give some spread to account for it.

Calling those 2 functions should not take up dev time, albeit the audit cost, else we could just have seraph suggestion where we have kyc and have gmx team members executing this, just place a twap on gmx platform in addition to uniswap.

Alternatively maybe contributors could contact whales to conduct an OTC of gmx, this would allow us to prevent frontrunning and reduce sell pressure from those whales.

Tbf sending the full sum to buyback bot is another alternative but be bad price execution.

Personally i share your concerns, increasing to 5 would require 3 malicious actors and if possible would be keen if all the nominees are gmx contributors. Especially you being part of it X.

5

Hey @0xjunwei,

Appreciate you taking the time to write this proposal.

That said, the proposal currently combines two separate objectives into one electing the Treasury Committee and allocating $5 million from the treasury. It would be better to separate these into distinct proposals for clarity.

Ideally, the Treasury Committee should be responsible for recommending allocation amounts based on research and data. Currently, the treasury holds $43 million, so the proposed $5 million represents around 11% of total funds. Additionally, a significant number of buybacks have already been conducted using collected fees approximately 12.25% of the token supply has been repurchased to date.

Zodiac module could also be a good tool to control the treasury multi-sig and delegating roles to the members of the committee: Zodiac Roles Modifier - Zodiac Wiki

1 Like
6

Hey thanks for the response @Saurabh understand on token sum etc, would be glad to separate the proposal and have the treasury committee to decide on the appropriate amount.

With regards to the quoted statistics, I do understand that a huge supply has been purchased previously, but those are given out as staking rewards, my thought process for this proposal is to gather a sufficient supply to allow GMX to conduct a points program / incentive program to incentivize more traders to trade on GMX.

Thanks for recommending the tool for multi-sig end of day the proposal is to try and get a Treasury committee so that GMX could buyback without any DAO votes to prevent frontrunning. I think we can all agree that if the sum is too little we cant gain sufficient % of supply to do a points program that be another concern, generally wouldnt mind discussing to give out the tokens as esGmx after the airdrop or partial to prevent short term selling.

1 Like
7

Interesting idea. I’d like to suggest that we don’t even need to use passive buying methods—like limit orders—for execution. Passive buying doesn’t provide price support.

We can adopt active pulse buying, similar to a single active buy order of 10k, to support the price. Sky and others’ buybacks are similar to this kind of active buying.

Active buying pushes up prices and psychological thresholds. Due to the anchoring effect among retail investors, prices are more likely to move upward. Even if they fall, the decline won’t be too significant. This is a common market-making technique, often referred to as “ignition.”

We just need to ensure that the price deviation per pulse is less than 2% to consider it successful.

2 Likes
8

image
image1452×750 61.7 KB

I support your proposal, this is the current $GMX balance on CEXes, just as a reference.

3 Likes
9

Given feedback, i think the treasury committee should be made up of gmx contributors. Similar to how contributors controlling access to the treasury.

Instead proposal should be for allowing GMX Contributors to utilize treasury to buyback tokens at the current market prices.

We cant avoid the fact that on-chain would reveal movement of funds given all addresses are public.

Alternative measure be through a intermediary to pre-purchase the set funds and it would conduct a swap with the treasury.

Else we could just do a twap/iceberg order be it on chain and on cex, this would reduce the impact but it is not a perfect solution.

An alternative to all would be to send the funds to buyback bot to help purchase the GMX reducing all these overheads where we have to ensure committee is not a threat actor, once tokens has been purchased it be sent back to a multi sig controlled by the security committee and pend a new proposal for a points program.

Would hope for more thoughts and adjust the proposal accordingly.

10

that’s true, having a contract with one or two functions including auditing it should not be too time consuming, the DAO can also approve this contract as a Subaccount so that funds don’t ever need to be moved into this contract, the funds would just be used to create swap orders on GMX directly and the receiver would always be the DAO, this would minimize custody risks

2 Likes
11

Hey X, wondering if it be better to just vote to allow current committee to utilize it, given they have control of funds.

We reduce external risk already, and be just based on amount to twap, do think u need a sufficient supply to conduct a points program.

Additionally how fast it be for gmx to implement a points system for traders?

12

Additional benefit of this contract would be that, buyback could be sent here instead and DAO can buyback at specific levels instead of getting arbitraged.

13

My proposal Dynamic BBD Adjustment - Capping APR and Accumulating Overhead does exactly that- steadily buys and removes GMX from market creating buy pressure and token price uptrend. Only difference my solution is long term play and accumulated GMX will eventually be paid back to stakers (only when token price rise enough to catch fair valuation). And the best part- no treasury committee, no new contracts or audits needed because everything already in place and working fine for a year.

Your solution is desperate price manipulation in hope $5M market buy will make big impact and lasting impression. It wont. We had big flash rally on 2025-07-09 when price shot from $14 to $35 and it was short lived because 500k GMX was unstaked and dumped same day at avg $20 price so amounting $10M. And in next few month we had another -50% token price drop to $7.85 just yesterday. Putting in perspective my proposal to cap APR at 10% should create ~$20M buy pressure a year assuming $10 GMX price and $28M fees for buybacks from last year.

I’m for using current treasury funds for initiatives, points program or any other marketing activity. But we have enough GMX in treasury already and it’s no point to convert valuable ETH or USDC to more GMX.

14

Spoke with saulius, will see how much gmx that is not in LP and adjust accordingly to proposal if needed.

15

Sorry, I didn’t mean to attack or be hostile towards your proposal. My point was that we already have enough funds in the treasury for your proposed points programme. So, we can start straight away, skipping the ‘buy from market’ part.

However, after checking, I found that there are only ~150k GMX tokens sitting in various protocol wallets or have not been claimed from LP positions. That’s a bit too low, so maybe it’s a good idea to buy from the market after all. However, I really dislike the idea of spending current treasury funds, as they are not large enough to withstand prolonged bear markets and current development and maintenance expenditures. According to my calculations, we are spending around $500k per month, so the treasury could be depleted in a few years at this rate.

Perhaps we could buy back from the market, but not with current treasury funds, rather with upcoming treasury fees, allocating part of it for BB? This would provide automatic protection against overspending.

3 Likes
16

Thank Saulius for pulling the numbers.

Personally think a points program would require at least 5% of supply based on recent airdrop.

Using current fee rate, it is inevitable to touch some part of treasury numbers wise i think we can discuss on what is a appropriate sum, I think this plus a strong marketing outreach on CT to farm the points by trading on gmx would cover the initial cost, as 10% of all fees would still go back to treasury. No point for afew years of savings if our OI is dipping due to HL/Aster/Lighter getting all the traders.

Maybe more could comment on the appropriate numbers that we could use for purchasing tokens for this points program. dont wish to drain the treasury too

the reason for 5m number was based on recent 19m from price impact buckets collection, so i believe it is still a healthy sum to utilize for points program.

1 Like
17

Additionally I dont want this sum to be frontrun, purpose is to accumulate as much GMX as possible for the program so keeping price impact to be minimal.

would suggest looking into OTC, twapping as discussed above while reducing counter party risk.

Buyback bot is the lowest counterparty risk but has heavy price impact due to onchain.

not sure if we do a 500k (x amt) monthly buyback to add to airdrop pool be another solution.

1 Like
19

Hi all based on all feedback gathered in the past few days, I think it be best to amend to proposal to the following:

  • @Saurabh and @Saulius : 5m is a large chunk of treasury at 11%, however i feel we should act fast to prevent OI dipping more, we should attract as much traders as possible, and a trading incentive can be a way to stop dropping OI for now while dev works on new features + fee reduction and staking discount.

My solution: 416,666 per month twap into buyback bot.

Solves counterparty risk raised by @xdev_10 as we dont have to give treasury committee or anyone else access to a large sum and trust issues.

Current weekly fee is 700-800k usd, at 27% buyback bot is already purchasing 170k usd per week thus this is a marginal increase to buyback bot to be earmarked for points program. roughly 104k per week, but we can just place it monthly and have a monthly tweet from GMX account saying x amt bought back this month for the incentive program (good marketing at the same time)

Allows team to immediately implement a points program, and concerns of us timing the market will be removed, as we are doing a 1 year twap.

Throughout one year, the twap be amount 5m usd, while gmx treasury be earning 10% of the fees so should recoup a % while trying to push OI up, 70k per week on current numbers goes to treasury thats 280k per month, so we should recoup majority of this 5M over 1 year, assuming even if OI doesnt go up and fee remains the same. Numbers are based on worst case scenario today at 700k fee, while historically our numbers have been higher, thus this would be a marginal increase to be added towards buyback bot, I do hope OI goes up in this scenario thus GMX treasury could refill this 5m spend over a year.

No additional dev time needed, other than a tally vote to send 416k usd to buyback bot monthly and a new multi-sig to hold the GMX, plus immediate focus on a points program to traders.

Would be happy to hear your thoughts @Seraph @gmsolq @xdev_10 @Saulius @Saurabh

Thanks again, and happy to amend as per new issue raised. Additional proposal would then be raised on how we should airdrop / points program / vested for this trading campaign.

20

image
image1002×389 30.1 KB

Currently based on docs addresses, available funds are shown, not inclusive of LP.

Thus i think proposal is fair, and is not straining treasury by twapping monthly.

In addition would ask if team would think it be possible to use the current GMX holding 50k GMX to bootstrap the initial prize pool for points program in addition to the twap, if there GMX tokens are earmarked for other purpose then would not add into proposal. (Understand there is the GMX Sol Proposal but thus deducting the balance)

21

Current buyback bot (FeeHandler contract) can’t be used because it has no functionality to “feed” it with additional outside funds for buybacks. Bot works by claiming fees from GM markets and converting them to GMX. No other way around.

1 Like