GMX proposal to change revenue model proceeds to on-chain vote stage

On-chain perpetual and spot cryptocurrency exchange GMX has announced that a proposal to change the platform’s revenue distribution model has entered the on-chain voting phase.

According to the announcement on July 31, the new revenue distribution model aims to increase the long-term value of the GMX (GMX) token. Currently, the DEX protocol supports a model that allows for the repurchase and distribution of Ethereum (ETH).

What’s happening?

The platform announced that the instant vote for its new ‘Reclaim GMX and Distribute GMX’ proposal has passed. Therefore, the proposal has moved on to the next stage – an on-chain vote where the GMX DAO community must approve or reject it by August 4th.

If approved, GMX will abandon its current “buy back ETH and distribute ETH” revenue distribution model. In addition to increasing the value of the native token, a buyback for GMX instead of ETH will also preserve the benefits of real returns for users.

Basic recommendations

However, the “Reclaim GMX and Distribute GMX” proposal will give users the option to convert distributed GMX to ETH. This means that network fees will be stored in GMX and distributed in the same token, and users can convert directly.

According to the details of the proposal, the repurchase agreement will allocate one-seventh of the fees to the purchase of GMX. This will occur every day for seven days, and the repurchase price will be based on the Chainlink oracle price of GMX on Arbitrum (ARB) and Avalanche (AVAX).

The repurchase agreement will also impose a premium on the revenue model, which is expected to gradually increase from 0% to 5% throughout the week.

GMX’s trading model allows liquidity providers to earn fees from spreads, funding fees, and liquidations. DeFiLlama currently ranks GMX as the 45th largest chain by revenue and fees. Competing protocols include dYdX and Jupiter Perpetual Exchange.