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

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

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

What’s happening?

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

If approved, GMX will drop the current revenue distribution model of “buyback ETH and distribute ETH”. Other than 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, however, have an option for users to convert distributed GMX to ETH. It means network fees will be stored in GMX and distributed in the same token, with users able to convert directly.

According to details of the proposal, the buyback contract will allocate a seventh of fees towards the purchase of GMX. This will occur every day for seven days, with the buyback price based on GMX’s Chainlink oracle price on Arbitrum (ARB) and Avalanche (AVAX).

The buyback contract will also enforce a premium to the revenue model, with this set to gradually increase from 0% to 5% across 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.