I’m with Saulius on the max MP boost issue. A vote on what the boost should be was taken and OGs accepted 200 as a compromise because it was roughly where percentages were at that time. Personally I preferred the 300% boost because it would have given another year of incentives to long term holders. Touching that subject again is a big middle finger to long term stakers and equally sends a bad message to people who have been staking since that decision believing they can grow their effective MP boost to 200 based on a vote having been taken. All it would do in my opinion is introduce more short term volatility around strong fee weeks and reduce long term holders overall. That reduces quality participation in governance and in the community as well.
Anyway- mathematically there is only a marginal difference in incentives for new stakers and what boost apr they reach in what time. If max boost is left untouched you can have a higher boost apr and it would take stakers roughly the same time if boost and APR were lower. Cutting the max boost again would just be a one-time redistribution of revenue share from OGs and 2years plus stakers with max (>100) boost to new entrants and it would be temporary- much as the change from unlimited to 200% only temporarily affected the base APR.
The actual apr balance that is achieved afterwards is a mere result of market participants making rational decisions, based on risk/return profile / ev of fees.
The max boost being higher is a much stronger incentive for long term holders ensuring a level of price stability) than a (temporarily) higher base apr. The moment base apr goes up - price adjusts up and the apr drops. So while I agree that for a moment in time this will help boost price it doesn’t have a lasting effect on Apr or incentives for new buyers, rather it will disincentivize long term stakers as their revenue share not only is deluted by new MPs coming into circulations but also by a further reduction of their max boost. As it is - people with over 200% MP boost have three choices - buy more gmx to avoid being diluted. Sell off gmx to reduce excess (useless) MPs - without any kind of impact on their apr, or getting their effective return diluted.
If gmx price rises further - incentives for long term stakers to buy more to make use of accumulated MPs goes down as well.
That being said, I’m in favor of a 25% boost apr. It seems adequate - encourages long term staking and it would slow dilution of ALL stakers.
I’m also against making MPs tradable freely, though a pool would be an interesting concept.
What if those MPs could get a cut of the floor price fund returns (assuming the FPF is staked with GMX). It may be insignificant but it would be some utility.
How it can “lead to a large supply of MPs allowing anyone to reach max boost” if we reduce issuance rate, majority of all issued MP already staked and where are no possibility to unstake it? Only way to get unstaked MP is by harvesting rewards after already reached MP cap. After staking MP you can’t ustake, only burn it by unstaking GMX/esGMX. My assumption there will be very low amount of unstaked MP so no big deal if it will be transferred out of wallet to avoid burning. Main burning heat will hit staked MP . If we are allowing MP to trade between wallets there is no point to chase it for burning. However if at GMX/esGMX unstake moment there are some unstaked MP in wallet they will burn anyway as per current rewardrouter logic.
Best part of my proposal- we already have all in place- no need to develop or audit anything. Can be implemented immediately. Need to change just 2-3 config setting in current contracts.
Ive staked for a year, 100% boost, but let’s face it, having MPs is only good for OG and makes GMX price like a stable coin.
All comes to what we want : a more stable main token price with low yield and a better one for long term stakers, or a moving main token with better capitalization.
Keeping away new investors is the best way for us to die. We need to move on and bring new blood. Only the complet removal of MPs can do that. Or reducing the MP cap to 50%, but we cant go back to a previous vote, can we.
Maybe we can keep the MP system only for locking gmx : lock 1y your GMX to get a 20% boost apr, lock 2 years to get 40% during the locking period, then the MPs are burnt.
we can make a proposal for MPs to be burnt linear. No need to brun them all instantly. Instead of farming MPs; its burning at the same rate we were farming them ? So people who staked long time will still enjoy their MPs for a while, decreasing, and no new MPs will be farmed.
This is one of the better more simpler solutions, but it still requires newcomers to stake for 1 year to receive non diluted yield. I think the most important change here is to give newcomers an equal playing field. How about this
remove the mp system entirely
give long term (tbd on length) stakers a one time esgmx airdrop (amount tbd)
for the insta sell high week apr dumpers, require a 3 week lock on tokens upon stake
if the stakers still wishes to unstake during that time a linear proportion of their tokens get removed from their balance, and sent in a pool to be distributed to long term gmx stakers as esgmx .
I agree with this proposal; it’s very fair and doesn’t deactivate anyone’s MPs. MPs can be issued indefinitely, but since we’re going this route, we should be more aggressive and resolve the issue once and for all: 70% for (GMX + esGMX) and 30% for MPs; or 80% for (GMX + esGMX) and 20% for MPs, instead of adopting a middle-of-the-road compromise of 50% for each.
GMX should inherently hold the dominant position, while MPs should just be a minor additional reward. We should not and do not need to place MPs on an equal footing with GMX.
Why it will reduce GMX demand? I think opposite- it greatly increase GMX demand, because pure MP without staking alongside GMX has no intrinsic value. Current concern is few want to buy GMX because initial staking APR is too low. By letting MP trade freely anyone can buy GMX + 2xMP in market and stake for 200% boost straight away. So i see only bigger GMX demand not lower.
For OGs who currently have 200% boost, xdev_10 proposed 50/50 sharing will cut current fee rewards by -33% ! And your proposal cut fees respectively by -46% or even -53% !! No one will vote for it even who desperately wanted 100% MP cap. Because even they will be severely affected. And it completely destroys initial MP purpose to “softlock” GMX staking. Will be almost no financial punishments for GMX unstaking and worthless MP burning.
I respect and understand your position as an OG, including the fact that I also have many accounts with 200% boost. If I were to act purely in my own best interest, I would vote for 1% GMX and 99% MP, which would certainly maximize my short-term benefits but would directly destroy GMX. Therefore, my proposal is to offer a choice, whether it’s 30% 70%, 50% 50% or 70% 30%, depending on what community decides.
As for myself, I have significantly more MP than GMX+esGMX, yet I will still vote for 70% GMX and 30% MP.
Assumptions:
Base APR 4%
MP boost currently circa 125% per Saulius dashboard.
If we apply this 50/50 split it means that base APR would be 4.5% and MP would yield 3.6%.
Although idea presents a neat compromise, I believe it would not be effective. It is however long-term safety net for GMX base APR as it won’t be further dilluted.
I think it reduces demand for GMX tokens because, e.g. base APR is 5%, staking 100 GMX would result in yield equivalent to 5 GMX per year, if a new user wanted to receive yield equivalent to 15 GMX per year, the solution would be to obtain 300 GMX, if MPs are tradeable, that demand would go to MP tokens, so the new user would purchase 100 GMX and 200 MPs instead
Respectfully, I feel that the “mp problem” being referenced by many people in this thread isn’t clearly defined. And yet it’s being cited as the reason for making major changes to the protocol’s tokenomics.
If it’s a concern over demand for GMX tokens, then the “burn all mp’s or reduce their apr” contingent should explain why the token rose 17% (from $53.32 to $62.37) in a roughly 30 hour period this past week despite no changes to the boost cap or mp generation rate.
If it’s a concern over growth of the userbase, then the “burn all mp’s or reduce their apr” contingent should state how many new users we are currently getting and how many they think we “should” be getting, and why the vague “mp problem” is the what’s holding us back. For reference, as per the dune dashboard, one of the peak trading months was just this past November (so 4 months ago), a period of time that already featured users with >200% boosts and the same mp apr as now.
The reduction of APR of multiplier points feels like a solution in search of a problem. And this “solution” can create so many new problems that it’s a bit worrisome at how they’re being glossed over.
Some of the problems that the “burn all mp’s or reduce their apr” contingent aren’t adequately addressing:
By reducing the APR of MP’s, it effectively renders it impossible for new users to catch up to the folks who diligently stacked MP’s for 2 years. Following Seraph’s original proposal of leaving existing MP’s untouched, but turning off (or reducing) the spigot of MP, essentially cements the current holders at 200% as a permanent sole governance class.
By reducing the APR of MP’s, or burning all MP’s altogether (as some have suggested above), it obliterates the incentive of users to not unstake the gmx coin during volatile periods. In the telegram channel, people have repeatedly cited the MP’s as their reason for not unstaking/selling. I can’t wrap my head around the logic of removing this clearly defined incentive. Whales don’t swing-trade GMX the way they do other coins. Removing the “softlock” mechanism will open the door for large holders to mass dump in search of higher yields and profits, something that didn’t happen during the most recent bear market.
During the recent bear, many top 100 coins fell 90% or more. (Take avax as an example - $133 to $14) Whereas GMX dropped from $90 to $40. Of the top 60 gmx holders, only 5 reduced their positions during the bear. Without MP’s, we could have gone back to $2 as the big holders would have either tethered up or sought alternate projects during that time. I have to wonder if there are some posters here who don’t realize that we’ll enter another bear in a few years due to the cyclic nature of the market. Removing this valuable safety net doesn’t seem like a recipe for the long-term prospects of this project.
When is a governance coin not a governance coin? When you propose a re-vote only 5 weeks after the 200% cap was implemented. Changing the cap to 100%, or any other cap, undermines the credibility of the token’s value for governance. Last year, Arbitrum Foundation was found to be performing actions that ran counter to the governance vote, meaning their coin lost its credibility as a means of voting, and the price dropped from $1.45 to $0.80 or thereabouts. GMX should adhere to principles. By voting, you’re supposed to be agreeing to honor the outcome. There hasn’t been some great tech change or paradigm shift in the 5 weeks since the 200% cap was introduced to warrant a re-vote. I mean what cause of re-evaluation has occurred since then? “Hey we added NEAR, so let’s revote on the boost cap.”
And speaking of principles, the “let’s revote on the cap” contingent should answer the following:
Will you be willing to accept the outcome of this vote if it’s decided to maintain the 200% cap? Or do you intend to hold another revote in 5 weeks in perpetuity? If you are willing to adhere to this future vote’s outcome, then why won’t you accept the existing vote decision? And finally…are you propose “no cap” or say “300% cap” as available vote options, or are we going to enter into the absurdity of 101%, 100% and 99% as our only choices?
And I won’t touch on the precedent that holding a revote on the cap would set off. It would just further the loss of credibility in the token’s governance feature.
Presently I look at this thread and I can’t wrap my head around how reducing two of the coin’s features (mp generation and governance) are supposed to IMPROVE it’s value to potential buyers/holders. If people are dissatisfied with their yield %, they already have two wonderful options:
A) Stake MP’s
B) Propose new pairs, chain expansion, and tech (like adding MORE features to the token and to MP’s)
As a new comer to GMX (12% boost percentage…). The reason why I stake GMX is because I believe a 10b trading volume will happen on GMX in this bull run. Think new narratives ( GMX-Sol/ GMX chain) are a better booster for coin price rather than reducing APR for MP points?
“Think new narratives ( GMX-Sol/ GMX chain) are a better booster for coin price rather than reducing APR for MP points?”
The general issue is that activity by the devs is limited by 1) available time and 2) available # of devs. Let’s not mince words - things move at a slow pace due to the limitations of these two bottlenecks. Consequently, there needs to be some system of prioritization, because this is all a zero-sum situation. Meaning, any time devoted by the devs on one project is time they are not applying to another. For example, spending time reconfiguring contracts for MPs would inherently mean chain expansion, innovation and maybe even new pairs would all get pushed back, and perhaps beyond the window of the existing bull market. It could be a MASSIVE opportunity cost.
I liken it to the age-old pie analogy. You can either devote your time to re-arranging the existing slices distribution or you can devote your time to growing the entire pie. (An apr of 4% of a $10m fee week seems a lot nicer than requiring everyone have 12% of a $3m fee week.)
But what are those mechanisms for expanding the pie? New uses for the gmx token, new uses for MPs (which Kalcrypto recently made a telegram post on), new chain ideas, new pairs, new bridges, and maybe even new trade mechanisms. Maybe as a flip-side to this proposal thread which (in my opinion) is acting as a consolidation of regressive and potentially disastrous ideas, we should have a proposal thread that is simply listing new ideas that serve to “increase the pie” itself. The benefit to this is that it could receive feedback from the devs on the feasibility of the various pie-growing ideas.
Coincidence or not, but after 200% MP cap implementation from feb1 GMX unstaking (and selling?) picked up. We had 8,04M staked GMX/esGMX then and only 7,35M today so it is 690k GMX free float increase. Staking peaked at ~9M in the end of 2022 and is weakening since. No doubt if MP will lose it “soft locking” functionality we will see even bigger GMX flood to market and jump of price volatility.
. If we are allowing MP to trade between wallets there is no point to chase it for burning. However if at GMX/esGMX unstake moment there are some unstaked MP in wallet they will burn anyway as per current rewardrouter logic.