GM GMX: incentives
On the grant proposal submitted for the GMX v2 integration
The proposal discussed in this article is currently under review with the GMX DAO and can be modified / rejected. If it is accepted, we will move as fast as possible to get the incentives going. This article is therefore intended to give you a headstart.
Happy Saturday! As you might have read in our previous article, we are two days away from our GMX v2 integration. Neat, since this integration allows the creation of easily leveraged, delta mitigated positions of GMX LP positions. Low price risk / high fee reward.
The new delta neutral strategy however, is one of three reasons we are particularly excited about this integration:
- Simply delta neutral
- Grant proposal
- New token options
With today, a proposal to allocate additinoal incentives to the GM pools.
The proposal
For the full proposal click on this link.
Why now?
We often get the question why we haven’t sent in a STIP proposal. Aren’t you supposed to throw applications at grant opportunities and see what sticks?
The answer is quite simple: We don’t chase grants, and we will not send in grant proposals unless we know and can show that us receiving this grant will improve the ecosystem. During the STIP applications DeltaPrime Blue had almost no utilization in its lending pools. And while we knew this would soon change, we had no way of proving this.
With current utilization ratios however, we see the demand: With a 70.89% utilizaiton ratio, DeltaPrime is just as necessary on Arbitrum as it is on Avalanche. With utilization ratios like this, we actively improve the Arbitrum ecosystem.
GMX on their end looks to incentivize protocols for building upon, and improving, their protocol. While there is a significant number of other protocols applying for part of this grant, we know that us receiving part of the funds will not take liquidity away from better alternatives.
We can improve the GMX ecosystem.
The Grant’s Goal
DeltaPrime requests 100,000 ARB ($106,133.72 at time of writing) in the form of an open grant from GMX. It does so with three main goals in mind:
- Deepening GMX v2 liquidity (+$10mm)
- supporting the GLP -> GM transition
- Supporting the wider ecosystem
For those familiar with DeltaPrime, goal 1 and 3 should be very straightforward: DeltaPrime users redirect otherwise idle assets to more efficient pools (like GMX v2), deepening their pool while supporting the chain as a whole.
A critic however, might ask how a $3.5mm TVL protocol can supply $10mm+ to an integrated protocol. This would require an integration yielding enough to massively increase, not only the amount borrowed, but also the amount supplied on the Savings side.
The incentive
In the current plan, DeltaPrime will receive roughtly $100,000 in ARB incentives for v2. These incentives will be spread over the course of ten weeks, leading to, ceteris paribus, a weekly incentive pool of $10K.
Good to know: the incentives are only distributed over borrowed value. So if you have $100 collateral, $400 borrowed and you provide the full $500, you earn incentives over the $400 borrowed value.
Pro-tip: Creating a Prime Account focused on GM farming increases the incentives received, compared to using ànd Trader Joe v2, ànd GMX v2 ànd Yield Yak / Wombex strategies in a single Prime Account.
Due to this caveat, the total GM v2 TVL created on DeltaPrime can be way deeper with the same bonus APR. Below you find a graph showing the total GM deposited on DeltaPrime aned the bonus ARB APR this generates.
So to be clear: these numbers are for one collateral worth of incentives AND they do not take the GMs base APY into account. If you deposit $100 and borrow $300 at $4mm GM TVL (which would require us to attract 500k extra Arbi TVL, with 100% of our TVL being used for GMX v2 providing), your bonus APR will be 39%.
Potentially delta neutral.
This makes us excited.
Are you excited?
Great! Please drop us a supportive comment in the proposal on the GMX forum. Do you have constructive feedback instead? Also great! Please let us know in either our Discord, or as a comment in the proposal on the GMX forum.
Feel like delta neutral strategies and incentives aren’t strong enough reasons to be excited about this integration. Give us 24 hours. Tomorrow we’ll announce one more reason why we’re excited about this integration. But for now:
Let’s Unlock the Blockchain
About DeltaPrime
DeltaPrime is your prime broker on a mission to unlock the full potential of DeFi. We do this by providing secure undercollateralized loans, redistributing assets with a focus on maximum capital efficiency. Being built on the strong foundation of the Avalanche network, our Prime Account holders know they get fast and reliable transactions for their most important investments.
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