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GMX Proposal to Change Revenue Model Proceeds to On-Chain Voting Phase
GMX, an on-chain spot and perpetual exchange, has announced that a proposal to change the platform’s revenue distribution model has entered the on-chain voting phase.
According to a announcement On July 31, the new revenue distribution model aims to enhance the long-term value of GMX (GMX) token. Currently, the DEX protocol supports a model that allows the buyback and distribution of Ethereum (ETH).
What is going on?
Instant voting for the new proposal “Buyback GMX and Distribute GMX” has been approved, the platform announced. As a result, the proposal has moved to the next stage: on-chain voting, which will give the GMX DAO community until August 4th to approve or reject it.
If approved, GMX will abandon the current “ETH buyback and ETH distribution” revenue distribution model. In addition to increasing the value of the native token, a GMX buyback instead of ETH will also preserve the real yield benefits for users.
Key proposals
The “buyback GMX and distribute GMX” proposal will, however, have an option for users to convert distributed GMX into ETH. This means that network fees will be stored in GMX and distributed in the same token, with users able to convert directly.
According to the details of the proposal, the buyback contract will allocate one-seventh of the fees to the purchase of GMX. This will happen every day for seven days, with the buyback price based on the Chainlink oracle price of GMX on Arbitrum (ARB) and Avalanche (AVAILABLE).
The repurchase agreement will also impose a premium on the revenue model, which will gradually increase from 0% to 5% over the course of the week.
GMX’s trading model allows liquidity providers to earn commissions from spreads, financing fees, and liquidations. DeFiLlama currently ranks GMX as the 45th largest chain by revenue and fees. Rival protocols include dYdX and Jupiter Perpetual Exchange.