Proposal for Reintroducing esGMX Incentives to Boost GMX APR

Since the launch of V2, GMX has achieved tremendous success, with a parabolic increase in Total Value Locked (TVL) and trading volume. This version has also addressed the persistent imbalance between long and short positions from V1. However, the price of GMX tokens has remained weak, which is inconsistent with the overall growth of the project.

A key reason for this is the limited appeal of GMX to new buyers, primarily because its main selling point is real yield. As yield is a primary focus, potential buyers naturally compare the Annual Percentage Rate (APR) obtained from staking GMX, which is currently quite low, averaging around 3% - even lower than the average stake APR for USDT and USDC. For long-term holders with Multiplier Points (MP), the actual APR can reach 6% to 9%. With an average MP Boost of 115%, the actual average APR is around 6.45%, which is quite high in the context of real yield. However, potential new buyers are more concerned with the immediate value they can obtain, which is around 3%.

Since the price is driven by new buyers, it is crucial to minimize the apparent APR disparity between new and existing buyers. For instance, setting the APR at 20%.

For new buyers, their earnings would consist of 3% based on ETH + 17% esGMX. For holders with a 100% boost, the earnings would be 3% based on ETH + 3% boosted ETH + 17% esGMX. For those with a 200% boost, it would be 3% based on ETH + 6% boosted ETH + 17% esGMX.

This approach, without reducing the earnings of V1 and V2 LPs or long-term holders, narrows the APR gap for staking GMX from a significant 3x difference (3%/9%) to a more comparable ratio (20%/26%). Moreover, when compared horizontally with other projects, our APR stands out significantly, enhancing its attractiveness.

Regarding the inflationary concerns due to the reintroduction of esGMX, we can draw direct conclusions by comparing the price trends of GMX with and without esGMX emissions. It turns out that converting esGMX to GMX is quite challenging and does not lead to increased selling pressure.

In summary, to improve GMX’s price, we must reconsider the reward model from the perspective of new users. By increasing the notional wealth growth without affecting the existing distribution of rewards, we can address concerns and align GMX’s price more closely with its value.

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i am fully pro on this proposal . Lets make gmx apr great again to attract more investors to whole ecosystem

Fully support. There should be some balance between focusing on the product and new investors/token price (which will in return help with the next release/updates). With the extremely well done release of V2, it’s time to focus on the other side of the equation and help grow the GMX community/investor base.

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All due respect but I’m pretty sceptical regarding this proposal.

Having more esGMX in circulation will not solve the actual problem (low base APR) but will make it worse, unfortunately !!!

Indeed if more esGMX are minted it means that more tokens ll be staked, on the short term this ll be attractive for todays new comers but on the long run it ll diluted tomorrows new comers real yield further more.

Plus as $GMX has no direct impact on the platform operations it would be wiser to use esGMX to bootstrap liquidity when the protocol decides to launch on other chains, instead to use it for short term pumps.

Maybe some improvement can be make regarding MPs weigh in reward distribution, currently 1MP = 1 $GMX. If we go for something like 1MP < 1GMX for distribution rewards this would increase the base APR without diluting future new comers. Just an idea

Muz :blueberries: :sparkles:

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Product should be the priority over token price, as $GMX has virtually no direct impact on platform usage.

I think we need more real yield instead of more short term artificial yields that ll make the situation worse in the future.

Let’s play the game on the long run and think about sustainable way to make $GMX attractive to new comers

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Maybe instead of esGMX, Arb incentives should be used in order to not dilute, but still give incentive to new buyers/GMX holders.

Again, this won’t be an efficient way to spend resources.

$ARB incentives are better to be used to boost v2 adoption, onboard more traders & liquidity providers.

That will on the long run increase the real yield distributed to $GMX holders in a more sustainable way.

I’m all for ideas to boost real yield, but I haven’t seen much shipped from the team translate into higher real yield over the past 6 months, instead it’s been going the wrong direction, which is where the frustration and I think the idea came from by the OP.

I understand the frustration but as said earlier $GMX has virtually no direct impact on platform usage.

My guess is that team is currently pretty busy with implementing v2 features, then adding new markets, and onboard more traders and LPs. This is exactly what will boost real yields

I personally don’t see how short term base APR should be a high priority right now.

I would suggest to adjust MPs weight in rewards distribution as currently 1MP = 1 $GMX. If we go for something like 1MP < 1GMX for distribution rewards this would increase the base APR without diluting new comers. It’s just an idea

Let’s keep the convo and see if some community members will come with better sustainable suggestions to the team

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There’s an argument to be made to incentivise GMX staking by getting the APR above the level of standard Eth staking. To make GMX more attractive in comparison. But we shouldn’t aim for an APR around 10, let alone 20%. That will require significant token dilution, with little to show for it.

For God sake forget about APR and necessity to boost it! GMX base APR will never ever reach 5% or even 3%. GMX is “growth” token and is priced by big future expectation, so token price will always follow fees rise and at same time will bring staking APR down. On other hand if by saying “Boost GMX APR” you really mean boost GMX price- it is just mater of time. Be patient and give V2 at least 1 years to show it’s full potential. TVL, volume and fees are very impressive already and I am sure suppressed GMX price will not last for long. (for future reference GMX is at $52 atm)

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