GMX, a decentralized exchange that offers perpetual and spot trading, has revealed that a proposal to modify the platform’s revenue distribution system is now in the on-chain voting phase.
The new revenue distribution model is designed to improve the long-term value of the GMX token. Currently, the platform utilizes a model that involves buying back and distributing Ethereum (ETH).
In recent developments, the proposal for the new ‘Buyback GMX and Distribute GMX’ model has successfully passed the snapshot vote. As a result, the proposal has advanced to the on-chain voting phase, giving the GMX DAO community until August 4 to approve or reject it.
Should the proposal be accepted, GMX will transition from its current revenue distribution model of “buyback ETH and distribute ETH” to “buyback GMX and distribute GMX.” This change is not only expected to enhance the value of the native token but also maintain real-yield benefits for users.
Under the new proposal, users will have the option to convert the distributed GMX to ETH. Network fees will be collected in GMX and distributed in the same token, allowing users to convert as needed.
As outlined in the proposal details, a portion of the fees will be allocated to buying back GMX. This process will take place daily over a week, with the buyback price based on GMX’s Chainlink oracle price on Arbitrum (ARB) and Avalanche (AVAX). Additionally, the buyback contract will gradually introduce a premium to the revenue model, starting from 0% and increasing to 5% throughout the week.
GMX’s trading model enables liquidity providers to earn fees from various sources, including spreads, funding fees, and liquidations. Currently, GMX is ranked as the 45th largest chain by revenue and fees on DeFiLlama. Competing protocols in the space include dYdX and Jupiter Perpetual Exchange.
This proposed revenue model change could have significant implications for the GMX platform and its community. By shifting to a buyback and distribution model centered around GMX, the platform aims to bolster the value of its native token and offer users enhanced benefits. The upcoming on-chain vote will determine the fate of this proposal and potentially shape the future of GMX’s revenue distribution strategy.