🌎 GMX Proposes New Revenue Model to Boost Token Value

GMX, an on-chain perpetual and spot exchange, has announced that a proposal to change its revenue distribution model has entered the on-chain voting stage.

According to an announcement on July 31, the new revenue distribution model aims to enhance the long-term value of the GMX token. Currently, the DEX protocol supports a model that allows for a buyback and distribution of Ethereum.

What’s Happening?

The snapshot vote for the new ‘Buyback GMX and Distribute GMX’ proposal passed, the platform announced. Consequently, the proposal has moved to the next stage—on-chain voting—where the GMX DAO community will have until August 4 to approve or reject it.

If approved, GMX will shift from the current revenue distribution model of “buyback ETH and distribute ETH.” In addition to boosting the native token’s value, a buyback for GMX instead of ETH will also preserve real-yield advantages for users.

Key Proposals

The “buyback GMX and distribute GMX” proposal will include an option for users to convert distributed GMX to ETH. This means network fees will be stored in GMX and distributed in the same token, with users able to convert directly.

According to the proposal details, the buyback contract will allocate one-seventh of fees towards the purchase of GMX. This will occur daily over seven days, with the buyback price based on GMX’s Chainlink oracle price on Arbitrum and Avalanche.

The buyback contract will also enforce a premium to the revenue model, gradually increasing from 0% to 5% over 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. Rival protocols include dYdX and Jupiter Perpetual Exchange.