Thread 1 on Resolving the MP Discussion: Defining the Problem

As discussed in the telegram, given the level of debate, concern and reaction within the community to suggestions of modifying MPs and other tokenomics, as well as the very large number of potential solutions that have been put forth, a strategy of “consolidation” is being attempted in order to achieve an orderly solution.

I’ve proposed a three-stage process: Define, Refine, Resolve. Given the potential scale and consequence the vote outcome may have for the short and long term prospects of the GMX project, as well as to move the discussion away from congesting the telegram channels, each of these stages will have their own thread.

This is the Define thread

One of the criticisms is that the issue still seems vaguely defined, often with multiple topics being attached to the discussion of MPs, making it more difficult to ascertain effective solutions. As we move towards creating a vote, the purpose of this thread is to:

  1. Craft a clear and concise description of the problem which the community is to address.

  2. Aggregate the data used to reach this description of the problem.

  3. State why this matter should be addressed be prioritized by the dev team over innovation, expansion and new-pair work, or if you’re willing to table it until after some other growth action items. That is to say, clarify the level of prioritization you feel it should have, within the context of dev time being limited.

IF YOU ARE OPPOSED TO MAKING ANY CHANGES OR DON’T BELIEVE THERE IS ANY PROBLEM, DON’T POST IN THIS THREAD. That time is set for Thread 2, which will go up at a later time.

I won’t be posting anymore in this thread, but I do look forward to seeing this final, concisely stated problem. Also it would be super cool if the final statement of problem was kept to just 1 to 3 sentences.


For the problem statement, here’s a start:

Multiplier Points could function as an excellent marker of long-term protocol commitment. However, they are currently accrued only by stakers, and not by any of the other crucial stakeholder groups (LP’s, Traders). A better loyalty system incentivizes and rewards all added-value activity.

Multiplier Points accrue fee rewards and voting power at the same level as GMX and esGMX tokens, undermining the value of the GMX token and ultimately monopolising governance power.

(the positive aspects of the MP system, like the soft-lock function, I leave out here)

Here’s how I would define the issue, and I think its simpler than many are making it.

  1. Multiplier point inflation is reducing the base yield of GMX token staking and the attractiveness of staking to new participants. This is suppressing the GMX token price, considering our platforms revenue, TVL and volume compared to competitors.
    MPs were a great boot strapping tool, but are now superfluous.

  2. (working on it)

  3. I believe that this is only a 5/10 priority as it does little to grow-the-pie as many have pointed out, beyond increasing attention to the protocol due to “token goes up”.

On the other hand, there exists an opportunity to massively boost the price of the GMX token, which would enrich dedicated holders, and drive market interest to our protocol, which may increase protocol business metrics.

Simply removing MPs would cause GMX staking base APRs to more than double, driving up GMX price, and foster a long-term sustainable model for the protocol. 200% MP stakers would see their proportion of fees drop by less than 1/3rd, average MP stakers would see no change, but the underlying GMX price could quickly rise 2-4 times where it is now, as the P/E ratio finds equilibrium and base APRs return to there current market dictated level.

As a current GMX holder, ask yourself which is a better position to be in:

  • 1 GMX at $50 earning $7.50 a year (15% APR)
  • 1 GMX at $150 earning $7.50 a year (5% APR)

Total fees distributed remains the same, but the underlying capital is worth more.

If the MP system was sunset, I would advise adding a simple 10 day cooldown after depositing GMX before you start earning distributions, to protect from mercenary capital. Tokens to remain liquid throughout.

These suggestions keep opportunity cost low, requiring less technical work from the dev team than other proposals.

I want to also point out that it would be preferable to keep the system exactly how it is today rather than reduce the APR of MPs. The price of GMX would decrease due to the reduced earning opportunities of new GMX stakes. Its a suggestion with its heart in the right place, but in practice reduces the bids GMX would get and therefor the price. Xdev’s proposed idea of redistributing the burned MPs of users who unstake is a far better middle ground than reducing MP APRs.

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How you came to conclusion that earning will stay the same for all GMX holders? I am GMX holder (200% boost) and earning for me as per you example will fall ~25% from $7.50 to $5.62 and APR from 15% to 3.7%

If you care only about GMX price for now imagine scenario in 1-2 years: we are in deep bear market, crypto activity is very low and GMX protocol generates almost no fees. Let’s forecast GMX token price without MP soft locking then… I can bet it will be 3-5 times lower without MP. MP is excellent protection from bear markets and we will have one in the future for sure.

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That is true but if You have more MP than Your staked $GMX You can unstake it and sell without risk of loosing boost.

Hello Saulius,
If you read the paragraph before the one you quoted, you will see that I recognize that 200% stakers will see a loss in the proportion off fees received.

The 15% i use in that example is the average APR advertised the the GMX earn tab, and therefore best represents the most users.

I dont come to the conclusion that earnings will stay the same for all users, just for users that are at the average.


Your analysis of the bear market scenario does have some merit.

All I can say is that there would be upward pressure on price due to the base APR representing a larger portion of the fee distribution, and downward pressure from people seeking other opportunities, as you mention. But if its a bear market, opportunities everywhere will be slim.

During the last bear market GMX was still earning a decent amount, not 0, especially for those with MPs. It was the base APR that suffered the most as it approached the ETH stake rate, the real competitor to our GMX APR. We need the base rate to stay well above 4% or the opportunity cost of GMX is too high.


When are we voting on the mp issue

after single side voting concludes, so likely tomorrow or the next day. almost certainly this week

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We’ve just voted for reduction a bit ago. This will not go forward as of now

nothing about that vote precludes additional and future decisions

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