GMX requires $7-9 million USD in operating expenses annually. According to the team’s previous proposal, these funds would come from future revenue, but we all know that these expenses are fixed, while future revenue is only projected, and payments are made in stablecoins.
We GMX holders have already suffered losses exceeding 50%, and our interests need to be considered. I’ve seen a successful example in the Rollbit platform, which accumulated $5.7 million USD in trading fees over a year. They provided nearly $20 million USD in LP liquidity, which strongly supported the RLB price.
My suggestion is simple: withdraw $14 million USD directly from the Treasury. Use $7 million to purchase GMX tokens over the next three months, forming a GMX-USDC LP. Future revenue distribution will be directly accumulated in the Treasury.
Slow purchasing over the next three months will prevent front-running and arbitrage.
The LP can continuously earn trading fees, which can compensate for any funding gaps if the GMX price falls.
If the GMX price rises and there are surplus LP funds, they will be returned to the Treasury. Trading fees will prioritize covering operating expenses.
While I like the intention here from this post which I assume speaks to what Alina is talking about in snapshot vote about doing something about GMX price ourselves and secondly more importantly to do something about the GMX liquidity. I just don’t think this is the way to address this problem and also the scale of this program without knowing whether it would have any positive effect on either.
Also why this has to be tied to operations? If DAO thinks we need to be more aggressive and do much more value capture immediately by spending treasury funds to do aggressive GMX buybacks lets discuss this and vote on it but why does that have to do anything with operations?
Also putting significant liquidity in GMX-USDC is also not proven can improve actual liquidity depth of GMX. Because GMX dex pricing is done through CL oracle which is taking prices from onchain dex liquidity(excludes GMX) and liqudity from CEXes. So meaning increasing significant liquidity in GM pools is not going to increase depth. It actually creates a vulnerability if GM(GMX) liquidity is signinfacntly comparable to CEX/DEX liquidity. Proper risk params need to be set with impacts which will inhibit arbitrage activity and eventually fees earned through this pool.
I am not sure how well this plan has been thought through that we can not only risk 14m of treasury but also tie operations to it bringinng immense amount of uncertainity for GMX future both in treasury and future growth.
Again please don’t get me wrong I do support some way to use our treasury to do something for direct GMX value capture(Support its price) and also maybe something to improve its liquidity(through maybe an explict MM arragement) but it needs to be sensible and not a knee-jerk reaction.
Just my 2 cents. I am sure there are much better qualified people who can weigh in on this.
I like the idea but it sounds prone to volatility. What if we put USD in a single sided vault? The catch would be we would have to use someone else’s protocol but I’m sure they would be happy to have a hefty boost in tvl and we would earn interest on the usd
