GM: ARB/USDC
The new GM: ARB/USDC pool is now live on Pendle!
With this, new avenues for our users to speculate, trade and earn the yield from GMX opens up.
Let’s take a look at some of the essential know-hows when it comes to yield trading for GM: ARB/USDC.
YT-GM ARB USDC
The GM:ARB/USDC was conceived as a special pool for #ArbitrumSzn 🎉
As a YT-GM-ARB-USDC holder, you will be granted long yield exposure to ONLY ARB rewards from the pool, and NOT any of the fees from swaps or trading.
In short, YT-GM-ARB-USDC provides an avenue for users to speculate on the ARB distribution by GMX, in particular this pool’s share of the ARB rewards.
Things to note:
- YT yield will consist of only ARB rewards, and not any of the fees from swaps or trading
- ARB rewards are accumulated in the SY-GM-ARB-USDC contract, and will be streamed linearly to YT holders throughout the following week, based on their share of SY at the point of distribution
- As such, the Underlying APY for this pool will remain at 0% until 22 November, 00:00 UTC (Week 0)
- Yield will only be streamed to YT holders on recurring basis, starting from 22 November, 00:00 UTC (Week 1 onwards)
Let’s take a look at our aspiring yield trader, Peepo as an example!
Week 0
Peepo buys 100 YT-GM-ARB-USDC on 16 November.
Since yield will only be streamed to YT holders from Week 1 onwards, Peepo will not be receiving any yield until the start of Week 1 on 22 November, 00:00 UTC.
Week 1 (Scenario A)
All of the ARB incentives earned collectively by GM-ARB-USDC on Pendle in Week 0 are distributed to the SY contract by the GMX team.
You can think of this as a pool of ARB rewards that is replenished on a weekly basis.
Starting from 22 November, 00:00 UTC, yield will be streamed from this “pool” to Peepo based on his share of GM-ARB-USDC held on Pendle.
Assuming this “pool” has accumulated 100,000 ARB from Week 0,
If Peepo has 100 YT-GM-ARB-USDC, and there’s a total supply of 1,000 GM-ARB-USDC held on Pendle, this would mean that Peepo’s share of the rewards is
100/1,000 = 10%
Assuming all else equal and nothing else changes, Peepo will be able to earn
100,000 ARB x 10% = 10,000 ARB
by holding his YT-GM-ARB-USDC throughout Week 1.
Week 1 (Scenario B)
Let’s say halfway through Week 1, Peepo’s friend, Peepa, decides to provide fresh liquidity worth 1,000 GM-ARB-USDC to the pool.
This would bring the total supply of GM-ARB-USDC held on Pendle from 1,000 → 2,000.
Before Peepa
For the first half of the week, Peepo will be streamed 10% of the ARB rewards based on his share of the pool:
100,000 ARB x 10% x ½ Week = 5,000 ARB
After Peepa
For the second half of the week, (no) thanks to Peepa’s entry, Peepo’s share of the rewards has been diluted.
Based on Peepo’s holdings of 100 YT-GM-ARB-USDC, Peepo’s share has reduced to:
100/2,000 = 5%
So for the second half of the week, Peepo will be streamed 5% of the ARB rewards:
100,000 ARB x 5% x ½ Week = 2,500 ARB
Total Week 1 rewards for Peepo:
5,000 ARB + 2,500 ARB = 7,500 ARB
As for Peepa, based on her share of 1,000 GM-ARB-USDC on Pendle, she would be entitled to 50% of the ARB rewards.
So for the half of week that she has provided liquidity, she’ll get:
100,000 ARB x 50% x ½ Week = 25,000 ARB
The good news for both Peepo and Peepa?
Peepa’s injection of liquidity likely in Week 1 here also means that the ARB rewards pool in Week 2 will be bigger (more to go around!), since the weekly distribution from GMX will depend on Pendle’s share of GM: ARB/USDC.
⭐ Yield Trading Hack
- Since the TOTAL distribution of ARB rewards in the beginning of each week, you can plan ahead and strategize by calculating your potential share of weekly rewards from buying YT (think trading, except everyone has a magic crystal ball 🔮)
- You can check the total supply of SY-GM-ARB-USDC here to determine your potential share of the pool ahead of time (1 YT-GM-ARB-USDC = 1 SY-GM-ARB-USDC for ARB distribution)
PT-GM-ARB-USDC
The modus operandi for PT-GM-ARB-USDC will remain largely the same as others.
In essence, PT-GM-ARB-USDC will be a means to:
- Attain fixed yield for GM: ARB/USDC, or
- Obtain more GM: ARB/USDC tokens at a discount
For every PT-GM-ARB-USDC held, you’ll be able to redeem 1 GM-ARB-USDC token by maturity.
LP-GM-ARB-USDC
GM-ARB-USDC holders are able to earn fees from swaps and leverage trading generated by this pool on GMX, with bonus APR given in the form of ARB.
Providing liquidity on Pendle will allow you to earn all of these rewards, with a little extra from Pendle on top:
🫐 Fees from GM: ARB/USDC
🫐 ARB rewards from GMX
🔹Fixed APY from PT-GM-ARB-USDC
🔹Pendle swap fees
🔹PENDLE incentives
🔹ARB rewards from Pendle
Note: There are 2 sources of ARB rewards, one from GMX, and one from Pendle.
If you have any questions, feel free to reach out to us on Discord! Promise we won’t bite.
