Reduce APR of Multiplier Points

Proposals
2

I agree that this is a crucial issue, which deserves a solution that carefully balances the interests of the various protocol stakeholders and fits GMX’s long-term vision.

Here are my initial thoughts:

  • MPs earn around 50% of all fee distributions. This is quite high.

  • MPs inflating forever would be a clearly negative dynamic.

  • the 200% Cap on MP’s earning power has set an important hard limit on the monopolization of fee distributions by long-term holders

  • However, it hasn’t yet addressed MP inflation and its growing share of protocol fee distributions

  • A cap of 50% APR on MP growth would meaningfully change this rate of inflation for the better

  • However, that cap would also mean new GMX holders accrue MPs at half the rate that old holders did. So it doesn’t yet address how to make staking GMX more attractive for new entrants.

Furthermore, I like the idea of building out the Multiplier Points to a comprehensive points system that rewards all user activities that benefit the protocol. This fits GMX’s democratic, community-centric ethos.

But I’m, for now, struggling to imagine how this can be done while simultaneously containing MP inflation.

Three questions I have:

  • What % of all issued MPs has been burnt due to holders unstaking their GMX/esGMX? This is a crucial thing to know, in order to weigh how bad the MP inflation issue actually is!

  • How would a decaying mechanism to reduce the APR of MPs from 100% to 50% over a say 1 or 2 years time frame affect this proposal?

  • How would limiting new daily MP distribution to the amount of MPs burned that day affect the situation?

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