[Proposal] Dynamic BBD Adjustment - Capping APR and Accumulating Overhead

[russiamanbit]

@xdev_10

would reverting to the old tokenomics bring back attention, i personally do not think so

APR Rewards in ETH was( ) really selling point for many of my friends when I shilled GMX to them.

[xdev_10]

i see

perhaps the idea to allow users to select the token they want to receive rewards in could make sense, as is being suggested on the forum posts

[ShoeStar]

Yes this is a much better approach than capping immediate Apr and messing with the distribution, this doesn’t really do anything long term this just seems like a productive solution but it’s not. Let’s simply go back to paying fees out in Eth, WBTC or a stable coin. Making it payout in gmx is a price suppression mechanism, especially when large wallets accumulate thousands of gmx than have to sell/ convert it. We do not need to change distribution the way OP stated. Simpler solutions not complex ones that don’t have long term value in mind.

[Btcfever]

@gmsolq

Essentially all marginal buying pressure for $GMX comes from BB&D, yet you’re engaging in simplistic attribution and even blaming BB&D.

“simplistic attribution”?

Q I told you nearly two years ago what would happen if we burn MP’s, and that’s exactly what ended up happening. The attribution was obvious then, so of course it’d seem simplistic now. Why do you think even your cronies are all silent? $60 when your proposal was announced, and $8 when Saulius’ panic thread here was made.

The data I’m basing this off of is the # of staked GMX (either we’re not attracting new stakers or its being offset by the people who are now unencumbered by MPs to sell), as well as the price continuously crabbing down despite your campaigning during the MP discussion that it would go up. Price going down during this past two-year bull market means people are selling.

@xdev_10

if i had to guess the true cause, it would be a dilution of attention with the increase in perp dexes

That’s been my point - that the previous tokenomics (points & real yield) were a protective barrier to the price level to keep it from dropping 90%. We got rid of both and now we’re a single digit token. And I mean real yield in the sense of yielding a token that incentivizes staking. Because receiving a real yield in a cryptocurrency that has a price chart as brutal as ours doesn’t incentivize new buys, except only by a bot.

I have a question for Q, that I think the entire community should see his response to: Given that essentially ALL of the drastic, major changes to the $GMX tokenomics have been ideas that you proposed, do you take any ownership of the current price?

XDev keeps bringing up that we don’t know what the “none of Q’s changes” alternate price would have been. But we know that in that scenario, people would be more inhibited from selling their tokens due to MPs, people would be more inclined to stake as a means of earning ETH staking rewards, our USDC liquidity wouldn’t be razor thin because there’s no bot causing it, and GMX token wouldn’t be getting exploited by fee farmers as a GM pool. How can that scenario not have a higher $GMX value than the one we’re currently looking at.

If all of our buying pressure is coming from the BB&D bot, then that’s a problem, not a success. Potential traders and potential stakers have been telling you and the GMX community for years what they want by avoiding the protocol during this recent bull. The pre-Q tokenomics gave then what they wanted. They want points. They want real yield in ETH. Why aren’t we giving the public what they want?

Sadly I think the answer to that is: Because it’s not what Q wants.

And that’s how we ended up in single digits. MP’s would have saved us from this.

[Saulius]

@Btcfever

Monstrous APR will be what we get since the price of the token will keep dropping. But that’s the rub - that APR is the only thing keeping us from a cascading liquidation crisis as stakers see their wealth continue to evaporate. Is there any number other than 10% you’d be open to? Why so firm?

10% is quite “firm” because at extreme times (GMX price stupidly low) we need to take extreme measures. Another a bit lighter option can be introducing APR target “band”, let’s say 10-15% and cut rewards above it or substitute below from buffer. But as I stated earlier we already have solid prove what 10% APR is is sufficient for serious holders if GMX price remains strong and in an uptrend. To prove this I’m posting the history of ETH rewards before the BBD change was implemented. You can see that during GMX “golden year of 2023” when the price hovered in $40-80 range only 10 out of 52 weeks we had APR 10%+. (expand section below)

ETH rewards for GMX/esGMX staking on arbitrum

Date	ETH price	GMX price	Distribute $	Staked	APR
2022-03-23	2972	27,64	534 951	7 085 355	14,2%
2022-03-30	3389	30,12	535 406	6 987 911	13,3%
2022-04-06	3299	39,11	735 658	7 194 591	13,6%
2022-04-13	3068	33,73	764 037	7 221 038	16,4%
2022-04-20	3094	37,20	392 920	7 236 102	7,6%
2022-04-27	2864	30,86	292 088	7 269 808	6,8%
2022-05-04	2853	30,20	322 396	7 320 463	7,6%
2022-05-11	2285	27,26	683 075	7 187 813	18,2%
2022-05-18	2013	21,13	724 677	7 213 003	24,8%
2022-05-24	1970	20,79	321 080	7 278 189	11,1%
2022-06-01	1901	20,77	528 604	7 369 980	18,0%
2022-06-08	1806	20,97	355 808	7 416 058	11,9%
2022-06-15	1140	14,16	517 783	7 470 544	25,5%
2022-06-22	1089	16,61	426 716	7 559 892	17,7%
2022-06-29	1124	17,49	246 253	7 574 222	9,7%
2022-07-06	1142	16,96	309 595	7 623 386	12,5%
2022-07-13	1067	24,56	287 100	7 666 349	7,9%
2022-07-20	1559	29,35	467 794	7 704 883	10,8%
2022-07-27	1495	27,51	436 504	7 774 555	10,6%
2022-08-03	1644	37,81	609 802	7 818 728	10,8%
2022-08-10	1759	39,59	357 004	7 828 805	6,0%
2022-08-17	1873	34,45	595 726	7 795 895	11,6%
2022-08-24	1651	38,82	711 545	7 907 769	12,1%
2022-08-31	1576	42,17	756 644	8 076 455	11,6%
2022-09-07	1547	48,89	685 488	8 054 362	9,1%
2022-09-14	1600	44,95	979 270	8 127 075	14,0%
2022-09-21	1330	37,50	1 033 315	8 126 961	17,7%
2022-09-28	1306	37,47	730 247	8 164 468	12,4%
2022-10-05	1348	46,70	479 723	7 830 138	6,8%
2022-10-12	1295	39,17	512 854	7 966 289	8,6%
2022-10-19	1301	35,99	433 128	8 076 041	7,8%
2022-10-26	1526	40,22	579 795	8 173 290	9,2%
2022-11-02	1562	41,45	663 774	8 178 590	10,2%
2022-11-09	1231	32,69	848 004	8 100 348	16,7%
2022-11-16	1231	41,18	1 634 546	8 284 419	25,0%
2022-11-23	1163	42,04	990 859	8 359 489	14,7%
2022-11-30	1271	45,23	1 011 889	8 333 696	14,0%
2022-12-07	1242	51,78	501 660	8 367 703	6,0%
2022-12-14	1324	53,62	815 361	8 294 615	9,6%
2022-12-21	1214	46,82	673 956	8 343 685	9,0%
2022-12-28	1198	42,82	361 826	8 337 234	5,3%
2023-01-04	1248	41,28	263 403	8 177 412	4,1%
2023-01-11	1336	44,68	1 118 186	8 208 354	15,9%
2023-01-18	1567	47,92	1 092 061	8 267 332	14,4%
2023-01-25	1558	50,62	730 645	8 242 909	9,1%
2023-02-01	1590	58,95	737 820	8 175 954	8,0%
2023-02-08	1666	68,75	829 906	7 999 360	7,9%
2023-02-15	1580	76,69	2 432 292	8 010 256	20,6%
2023-02-22	1636	74,14	987 862	8 008 336	8,7%
2023-03-01	1646	74,37	992 809	8 064 802	8,6%
2023-03-08	1557	70,45	490 362	8 067 570	4,5%
2023-03-15	1678	74,79	2 025 079	7 945 869	17,8%
2023-03-22	1786	79,45	946 457	7 991 659	7,8%
2023-03-29	1799	77,06	1 205 531	8 035 823	10,2%
2023-04-05	1906	78,93	1 160 976	8 088 254	9,5%
2023-04-12	1891	76,58	1 013 779	8 061 485	8,6%
2023-04-19	2019	84,40	989 262	7 977 959	7,7%
2023-04-26	1895	74,53	1 152 083	7 961 121	10,1%
2023-05-03	1870	68,93	1 032 012	7 946 717	9,8%
2023-05-10	1852	60,87	616 769	7 971 660	6,6%
2023-05-17	1815	62,50	518 917	8 016 028	5,4%
2023-05-24	1816	55,20	241 563	7 935 892	2,9%
2023-05-31	1875	54,60	418 174	7 942 863	5,0%
2023-06-07	1863	52,48	525 688	7 935 412	6,6%
2023-06-14	1730	45,60	432 503	8 158 724	6,1%
2023-06-21	1837	52,86	2 027 181	8 230 073	24,3%
2023-06-28	1857	53,20	651 542	8 238 300	7,8%
2023-07-05	1923	56,61	470 368	8 285 580	5,2%
2023-07-12	1885	55,49	352 227	8 312 892	4,0%
2023-07-19	1908	55,32	532 624	8 311 102	6,0%
2023-07-26	1862	54,30	326 645	8 276 357	3,8%
2023-08-02	1852	51,10	236 933	8 221 837	2,9%
2023-08-09	1856	50,13	250 048	8 172 158	3,2%
2023-08-16	1822	41,81	174 674	7 924 545	2,7%
2023-08-23	1654	36,76	651 320	7 896 476	11,7%
2023-08-30	1713	37,94	261 067	7 902 352	4,5%
2023-09-06	1631	33,17	232 526	7 876 626	4,6%
2023-09-13	1599	31,60	228 388	7 869 350	4,8%
2023-09-20	1632	35,94	154 849	7 875 679	2,9%
2023-09-27	1599	35,62	104 393	7 842 670	1,9%
2023-10-04	1643	38,16	211 346	7 766 219	3,7%
2023-10-11	1564	36,06	140 964	7 783 278	2,6%
2023-10-18	1572	35,60	236 758	7 772 640	4,5%
2023-10-25	1789	41,29	790 916	7 814 994	12,8%
2023-11-01	1814	45,38	315 464	7 850 745	4,6%
2023-11-08	1889	49,08	527 601	7 857 599	7,1%
2023-11-15	2008	52,78	1 842 168	7 838 694	23,2%
2023-11-22	2019	50,53	471 356	7 783 740	6,2%
2023-11-29	2047	49,15	256 533	7 754 376	3,5%
2023-12-06	2269	51,94	548 655	7 673 755	7,2%
2023-12-13	2201	47,35	694 687	7 668 282	10,0%
2023-12-20	2211	43,87	437 896	7 564 984	6,9%
2023-12-27	2290	48,09	511 151	7 514 451	7,4%
2024-01-03	2296	59,54	488 841	7 564 134	5,7%
2024-01-10	2416	52,29	857 326	7 556 498	11,3%
2024-01-17	2552	52,76	648 346	7 591 134	8,4%
2024-01-24	2231	41,07	1 087 590	7 556 855	18,3%
2024-01-31	2322	43,81	289 989	7 530 234	4,6%
2024-02-07	2386	43,88	264 590	7 506 238	4,2%
2024-02-14	2710	42,93	530 434	7 311 935	8,8%
2024-02-21	2943	46,08	527 608	7 207 067	8,3%
2024-02-28	3306	51,24	694 086	7 136 470	9,9%
2024-03-06	3767	52,55	1 201 053	6 940 162	17,2%
2024-03-13	4018	60,42	783 650	6 865 708	9,8%
2024-03-20	3289	44,84	892 741	6 848 172	15,2%
2024-03-27	3563	46,12	833 815	6 694 489	14,1%
2024-04-03	3319	40,23	605 963	6 684 694	11,7%
2024-04-10	3510	37,93	467 114	6 336 862	10,1%
2024-04-17	3045	28,34	818 916	6 637 783	22,7%
2024-04-24	3216	28,10	291 294	6 599 946	8,2%
2024-05-01	2939	24,62	322 577	6 578 404	10,4%
2024-05-08	3005	24,83	329 434	6 568 417	10,5%
2024-05-15	2945	29,48	503 175	6 646 004	13,4%
2024-05-22	3750	31,91	500 807	6 760 027	12,1%
2024-05-29	3808	34,34	448 929	6 761 053	10,1%
2024-06-05	3821	38,91	307 995	6 676 245	6,2%
2024-06-12	3553	35,17	397 675	6 595 357	8,9%
2024-06-19	3545	29,11	350 335	6 561 266	9,6%
2024-06-26	3383	28,47	321 808	6 625 159	8,9%
2024-07-03	3332	28,41	202 676	6 653 298	5,6%
2024-07-10	3098	26,06	641 022	6 669 858	19,2%
2024-07-17	3455	27,81	341 654	6 702 979	9,6%
2024-07-24	3428	30,92	331 665	6 828 685	8,2%
2024-07-31	3295	27,67	369 253	6 825 733	10,2%
2024-08-07	2446	20,74	690 021	6 788 307	25,6%
2024-08-14	2698	28,72	163 115	6 910 920	4,3%
2024-08-21	2603	25,12	183 720	6 887 331	5,5%
2024-08-28	2495	27,07	228 696	6 906 465	6,4%
2024-09-04	2416	24,97	216 598	6 962 319	6,5%
2024-09-11	2339	23,66	224 138	6 921 128	7,1%
2024-09-18	2321	22,88	165 544	6 919 267	5,5%
2024-09-25	2614	25,64	230 192	6 901 653	6,8%
2024-10-02	2447	21,99	241 544	6 882 168	8,3%
2024-10-09	2430	21,41	184 546	6 864 115	6,5%
2024-10-16	2616	23,16	262 597	6 856 852	8,6%
2024-10-23	2566	22,41	248 724	6 852 537	8,4%

@Btcfever

And (unfortunately but practically), have you talked to Q about this? Ultimately he’ll be the one making the decision.

Not yet (will do), but Q can’t opose this proposal because change from ETH to BBD was his idea with goal to support GMX price by removing it from free float and my current proposal just extends and strengthens the idea even more.

[Btcfever]

@Saulius

Not yet (will do), but Q can’t opose this proposal because change from ETH to BBD was his idea with goal to support GMX price by removing it from free float and my current proposal just extends and strengthens the idea even more.

That’s doubling-down on a net negative change. GMX price was “supported” by giving potential stakers what they wanted, a healthy apr that paid them in ETH (along with a points program to incentivize holding).

Saulius, right now we’re caught in a downward spiral. People sell their GMX because they don’t want it and the buy-back-bot happily consumes it at the expense of our USDC liquidity. Your proposal exacerbates this spiral because now we’re even removing the “healthy apr” aspect, literally the token’s last saving grace. How do you think many stakers will respond, especially since we now know with two years of staking data that there’s nobody waiting to replace them? Our only impactful buyer is a bot.

The medical analogy still stands. Your proposal is treating the symptoms rather than treating the disease. You should be concentrating your efforts on ways to bring the patient back to good health - capping the APR to 10% is an attempt to slow the bleeding while the patient is still dying.

I asked in another thread if anyone could cite an example of the GMX DAO making a major change to the $GMX tokenomics that resulted in the desired outcome. Not a net neutral, but rather the outcome Q predicted when he opened discussions on the proposals. No one included an answer to this in their replies. Saying that your proposal “extends and strengthens” Q’s idea even more is very disheartening.

Most of the people left in this community are bag holding copers, virtually all regretting not selling while simultaneously incapable of regretting their part in the token’s decline. You were special because you saw through Q’s bullshit, and like me you knew how the market would respond to this amazing incentivizer being removed. Its demoralizing and panic-inducing to see you now mirror Q’s viewpoints and propose another major change to the tokenomics without giving realistic deliberation on the reaction by long-suffering stakers to such a change. Regarding these long-suffering stakers - we’re now at the point where the #4 holder is making emotional pleas on the snapshot to set up auto-claim, because he can’t bare to look at the price anymore (he’d lost approximately $14 million by supporting Q). And then lo and behold many of the other MP-burn supporters announced they were in favor of this too. All of them saw their wealth evaporate and must now lean on the APR as their coping mechanism. You see it all the time in the telegram chats - even by you. “Just focus on APR” “No more price discussion in the price discussion chat, just talk about APR” (by mods no less) and your recent “Well you just have to buckle down and wait for the APR to eventually bring in the amount of wealth you lost by holding” (paraphrasing). The prospect of an occasional juicy APR is the last thing any $GMX holder has to cling on to!

What I’m trying to say is that: Stakers are now letting their actions be governed by emotion & (presumably) regret. Such people will not react favorably to having the LAST carrot pulled away from them by capping APR in favor of an overhead scheme. This final blow to their moral will induce at least some large wallets to finally give up (or at the very least sell a portion to hedge), as they don’t see any path left for $GMX to avert its crab downward, and 10% apr is nowhere near the returns they could find elsewhere or from competitors.

Q hammered nails into three corners of $GMX’s coffin: the removal of MPs, the removal of ETH rewards, and the further exposure of $GMX to price manipulation as its own GM pool. I’m so surprised and sad that the fourth & final nail isn’t also from Q, but rather you. It’s a Hollywood style twist that even induced my own reaction of panic.

In a perfect world you’d delete this thread and make some new proposals to elevate the $GMX token by making the product more desirable to potential buyers. The market is straight-up telling us that they don’t want $GMX under its current tokenomics. Let’s not “just extend and strengthen” the ideas that got us into this predicament. It’s akin to rearranging the deck chairs on the Titanic.

[Saulius]

@gmsolq

Equivalent to BB&D contributing 1.2M $GMX in buy pressure. However, since the launch of BB&D, GMX has experienced three large-scale sell-offs:

• The first was a 300K $GMX whale dump,
• the second was nearly 500K $GMX dumped due to the GMX V1 attack,
• and the third was close to 400K $GMX dumped from price manipulation.

These total 1.2M $GMX in sell-offs, essentially completely offsetting the effect of BB&D.

I partly agree, but there is no guarantee that similar unfavorable events will not recur. Perhaps it would be more accurate to say that they will definitely recur, but it is unclear when.

@xdev_10

i would reiterate that i am not 100% certain whether the tokenomic changes over the years are truly a significant cause affecting gmx’s current price

That was my opinion from the very beginning, that changing of tokenomics does not have a significant impact on the price (fees have). However, we now find ourselves in a situation where, due to competition and stale protocol activity/fees, we are experiencing a prolonged downward trend in GMX prices with daily accusations it goes to zero, so we need to find ways to reverse this. Because the price of a token is quite important for reputation and marketing purposes.

@Btcfever

Because receiving a real yield in a cryptocurrency that has a price chart as brutal as ours doesn’t incentivize new buys, except only by a bot.

I almost agree that bot is the only buyer left, which further supports my idea that he should be used for more aggressive buying from the market. New external buyers will certainly not come to our rescue while token price in free fall.

@Btcfever

The prospect of an occasional juicy APR is the last thing any $GMX holder has to cling on to!

This is self-deception. The current high APR is a linear function of the sharp drop in token prices. I have already presented data above showing that when the token price was high (>$50), the APR hovered around 5% and everyone was satisfied. So let’s ask ourselves again, do we want a high APR with a ridiculous low and still falling GMX price, or would we agree to a lower APR if the token price reverse to slow but stable uptrend?

[Saulius]

I would like to make a few minor changes to my proposal, taking into account these comments and concerns:

• Concern: “I do not like the fixed APR; it should be more dynamic”. Answer: I propose changing the weekly distribution calculations as follows: a certain portion (I propose 50%) of the GMX purchased during the week is allocated for distribution, and if this does not reach the minimum APR, then it must be compensated from the accumulated reserve. This way, we will still maintain my proposed 10% APR floor, but the upper limit will be removed and the APR could theoretically be unlimited.

• Concern: “The accumulated reserve may become too large, and there is no point in not distributing it”. To solve this problem, I propose setting a maximum limit for the accumulation of the reserve. Once this limit is reached, all excess must be distributed.

So, my final proposal, which will go to snapshot vote, will have three parameters, which we will be able to adjust in the future by separate vote, taking into account the results.

Weekly BB share for distribution: 50%
Minimum APR: 10%
Maximum accumulation: 10% of max possible total GMX supply (1.325M GMX)

I am attaching a table showing what last year’s distribution would have looked like under these parameters. Please note that there were 17 weeks with an APR above 10%. Of the 1,621,500 GMX purchased, 991,434 (~60%) would have been distributed, and 630,066 would have been accumulated (for future distribution).

[Saulius]

And a few more thoughts on why this proposal should appeal to almost everyone:

• Automatic compounding desire (we had such an unexpected vote quite recently). Accumulating GMX and not distributing it is practically automatic compounding, because even though you don’t receive them (you will receive them in the future), neither does anyone else, so your stake share and future payments do not decrease.

• MP promoters as a means to prevent unstaking. The GMX accumulated in the reserve will be an incentive to not unstake, because you are essentially leaving money on the table and giving up your already earned reward (which will be paid out to you a little later);

• Opponents of MP who wanted to abolish it to attract new token buyers. The GMX reserve will be an incentive for new buyers, as they will immediately acquire the right to accumulated rewards that they did not contribute to accumulating in first place.

• A lifeline for weeks with poor protocol fees. There is a tendency for the GMX price to fall when markets are slow and weekly fees are particularly poor. Now, with a 10% minimum APR floor and an accumulated reserve, even several weeks of poor fees in a row should not scare off holders.

[0xjunwei]

Thanks Saulius for taking feedback into account, i think this is better compared to before.

[ShoeStar]

If the bot is the only buyer left, than you are suggesting that this is simply a mechanism for whales to exit their position, since there are no other buyers, buying in large meaningful quantities. It sounds like this is simply a method for whales to exit their position with what they can. Return the fees to Eth, and lets attach a trading discount to stakers.?

[Saulius]

@ShoeStar

It sounds like this is simply a method for whales to exit their position with what they can.

If whales not exited and hodled for 2-3 years while price dropped 90% from $90 to $9 (me included) what is the point for them to exit exactly now?

[michael_A]

disagree setting an APR cap, as high APR is precisely the foundation for maintaining the GMX price.

As the price falls, a high APR will encourage buying. Even if the daily allocations are sold off, it will inevitably reach an equilibrium point at the lowest price. Restricting the APR, however, will greatly weaken this APR-driven buying power, leading to continued price declines. On the surface, reducing daily distributions would decrease the selling pressure from those distributions, but due to the APR restriction, it will actually lead to:

(1) Selling driven by reduced holding willingness, combined with diminished buying interest. Under the compounding of these dual effects, selling volume may even increase, causing further sharp price drops. Even if the selling volume decreases, without buying support, the price will still continue to fall.

(2) Increased token selling, with funds flowing to other projects offering higher APRs. Because of the APR cap, this capital outflow will persist, driving the GMX price into a continuous downward spiral.

In fact, under the current BBD model, the higher APR is gradually providing support for the GMX price. We can imagine an even more extreme scenario: if the APR could be sustained at higher levels, such as 50% or even 100%, the buying support would undoubtedly outweigh the daily selling pressure, pushing the price upward. In other words, the higher the APR, the stronger its ability to support the price.

Therefore, the right direction is to focus on promoting trading. The essence of boosting prices through increased trading is actually to elevate APR – high APR to attract more buying and staking to drive up the price. Restricting APR runs counter to the very essence of price support.

[Saulius]

@michael_A

(2) Increased token selling, with funds flowing to other projects offering higher APRs. Because of the APR cap, this capital outflow will persist, driving the GMX price into a continuous downward spiral.

APR is not capped in updated proposal. As per your example 50-100% APR with old model will produce 25-50% APR with my model.

And I’m repeating again ar again- APR target doesn’t mean “stealing” rewards from stakers. It just spreads (smooths) rewards over longer time period. All 27% from fees still flows to GMX stakers and buyback amounts stays the same.

[HanYolo]

Isn’t there a risk that the proposal supports gamification if we cap and keep GMX in reserve? This is also what I dislike about the current model using epochs. If I stake in high APR weeks i could offload in low APR weeks and we even have a bot showing us the data so it is very accessible and predictable. I would favor a model which would reward the stakers that were staking at the moment the volume happened, not the ones staking after they knew what is coming.

[ShoeStar]

Because if they tried today, they would lose 80% of what they have because theres no LIQUIDITY. You can own 200k gmx but if selling 20k tanks the price 10% the slippage will prob be atleast 50%. We have already established that our bot is basically the only buyer which tells us there is not sufficient liquidity to not have huge slippage. If a whale dumps the price will crash 50% meanign they fill their average price much lower than whats stated.

[Saulius]

So it’s only another proof what whales will not sell while GMX price hovering near ATL just because staking rewards will be postponed for later (accumulated).

As abig holder I would be very happy if a few whales retaliate the change and unload their bags at these ridiculous low token prices. It makes not difference for me already if GMX is $8 or $2-4 priced “shitcoin”. It will only allow the buy-back bot acquire more GMX at low price which will flow to patient holders later (but already more pricier GMX and more valuable rewards).

[Kalcrypto1]

I am in support of this proposal. It is a good one, the latest changes proposed by Saulius are improvement over the original post. One criticism I had was around hardcoding 10%.

I was wondering if it is possible to design the following three states without hardcoding 10%, 50%, 10% params.

• Contraction State
• Steady State
• Growth State

I came up with a MA idea for the same and did some modeling with past data since BB&D with the help of chatgpt, here is what I came up with.

At the same time I am not super optimistic about this proposal or think it would solve lot of our problems but it does address some key issues in terms of perception of token value and showing smoother return and a cohesive narrative. For the effort it takes it could be worth it.

As you can see the data is much more smooth and a more coherent narrative of GMX yield over time.

PS: Data is also quite skewed by the huge week we had in April.

[coinflipcanada]

some key concerns:

• Yield Expectation Anchoring: My primary concern is the 10% cap becoming a baseline expectation rather than a ceiling. This risks driving the token price down to meet that unsustainably high yield, even as a mature protocol would naturally stabilize at healthier rates (e.g., 4-6%).

• Fee distribution as a stabilized: Buying and distributing when prices are on the rise, does less than accumulating fees and deploying them to buyback and distribute when the token is below historical levels.

• Reserve Consumption Volatility: The current structure allows the entire reserve to be consumed rapidly when fees are low or price appreciation is high, leading to a sudden “cliff” effect and working counter to stabilization goals.

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Proposed Modifications for Strategic Stability

The goal is to ensure reserves are deployed strategically, not mechanically, preserving capital during strong periods and providing support when most needed. All parameters below are updatable by the DAO directly or through delegation to a treasury committee.

Parameter	Proposed Change	Rationale
Fee Split	50% of fees distributed, 50% retained in The Reserve. This split drops to 25% distributed / 75% retained once the Reserve crosses [x%] of total circulating tokens.	Implements a mechanism to aggressively accumulate reserves once a sufficient buffer (based on total supply) has been achieved, strengthening long-term stability.
Reserve Distribution Limit	No more than 10% of The Reserve distributed per week.	Provides a longer stabilizing effect and prevents rapid depletion.
Distribution Cap	Initially set at 10.4% (20bps a week).	Provides an initial ceiling, but is designed to be flexible.
Strategic Deployment Trigger	Reserve used to buy/distribute tokens ONLY when GMX is trading below a key technical indicator (e.g., 50/100-day MA, EMA, or other custom technical triggers).	Creates both natural and psychological support, deploying capital when support is most required. This is a crucial improvement for genuine stability.
Reserve Functionality	The Reserve smart contract must include a pause mechanism where fees simply accumulate without conversion or distribution effectively during periods when we are trading above the EMA / MA targets.	Essential for strategic control during extreme market conditions.
Initial Seeding	The protocol could gift or loan tokens into The Reserve to start, avoiding a sharp drop in initial fee distribution.	Mitigates a negative user experience during the transition phase.

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Strategic & Resource Concerns

While this mechanism is an improvement, we must question the overall prioritization:

• Resource Allocation: The protocol has generated $28M in buybacks over the past year using actual fees. Optimizing an already functional mechanism risks diverting development, governance, and community attention from areas requiring fundamental improvement.

• Focus: GMX’s main focus should be building products and better communicating protocol strengths.

• Mandatory Estimate: We require an estimate of both time and resources to be allocated for developing new smart contracts, changes to buyback/distribution contracts, and the necessary audits.

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Future Flexibility

• Review Mechanism: The DAO or a future Treasury Committee should be responsible for reviewing and updating the distribution mechanics every 6 months.

• Flexibility: The system must be designed to be flexible, not hardcoded, allowing for refinement as more data becomes available to automate the process.

[HanYolo]

I really think we are overcomplicating GMX for non expert users, which I think there are a lot in crypto. It should be straightforward and I sometimes have the feeling GMX community is filled with a lot of highly intelligent people trying to find an optimum with all these sophisticated solutions, while general public is loosing interest. I don’t think making things more complicated will solve anything tbh. If we really want tokens out of distribution let’s just burn them. I really have the feeling we are trying to solve price at a low point out of frustration rather than clear indications that something is wrong. Literally ALL altcoins are suffering and there a lots of reasons why GMX token is not doing well, like immense competition (HYPER, ASTER, etc.). I think we are looking in the wrong direction trying to fix price by adjusting tokenomics and creating even more complexity. There is more to a token price than just this.

As said earlier I think getting our USPs clear and investing in marketing is for me a way better way forward than keep spending our attention and focus on this topic. If we really want to change something I would keep it clear for the average investor. Adding ‘burn’ which reduces supply with a percentage of the fees would be a good suggestion imo, if we want to do anything at all.