Summary
In December 2024, we proposed adding GM ETH/USD as a collateral asset to the Venus Protocol money market on its Arbitrum network deployment. Following community feedback, a vote was initiated on Snapshot, which passed with a 100% quorum. The asset was subsequently successfully added to Venus Protocol on Arbitrum.
Now, GMX Contributors propose adding the single-sided GM: ETH/USD [WETH-WETH] liquidity asset to Venus Protocol on the Arbitrum Network. This addition would enable this popular GM liquidity token for the ETH/USD market, which has nearly $ 50 million in liquidity, to be used as collateral on Venus. This addition would allow liquidity providers on GMX to borrow against it, thereby enhancing Venus’ offerings, increasing its TVL, and solidifying its position as a prominent lending and borrowing protocol on Arbitrum.
Benefits of adding GM: ETH/USD [ETH-ETH] to Venus Protocol
- Increased demand for borrowable assets on Venus Protocol, driven by the popularity and low volatility of GM: ETH/USD [WETH-WETH].
- GM: ETH/USD [WETH-WETH]’s low beta properties make it an ideal asset to borrow against.
- Integration with Chainlink Data Streams in GMX V2 reduces the risks of front-running and price manipulation.
- $435.60 million of GM: ETH/USD [WETH-WETH] has already been minted on Arbitrum since inception. This demonstrates the asset’s popularity.
- The APR of this pure ETH liquidity pool stands at 7.5% (as of the time of writing); one of the highest yields on single-sided ETH available in all of DeFi.
- More than 4,500 Liquidity Providers are holding the GM: ETH/USD [WETH-WETH] token, making for a healthy, decentralised distribution.
- GMX V2 and its GM tokens are highly composable, and were designed with that functionality in mind.
The single-sided ETH liquidity token proposed for listing on Venus is already integrated into various DeFi protocols and money markets, including Dolomite, Abracadabra, and Vaultka, while AAVE has also voted in favour of its introduction. Combined with its deep liquidity, this shows ample evidence of significant community demand for the asset.
Performance of the single-sided GM: ETH/USD [WETH-WETH] token
When comparing GM: ETH/USD [WETH-WETH] to a traditional Uniswap V2-style 50/50 rebalancing pool composed of equivalent long and short tokens, the single-sided ETH/USD [WETH-WETH] pool outperforms by 8.861% over the last 6 months.
This highlights the advantages of GMX’s single-sided GM: ETH/USD [WETH-WETH] pool for liquidity providers, and its potential value as a collateral asset in money markets like Venus.
Motivation
GMX is a leading, battle-tested decentralised finance application, allowing users to buy spot crypto and trade perpetuals on 80+ top crypto assets. GMX V2 features robust market parameters that promote balanced open interest, including dynamic fees and opportunities to earn funding fees. This results in more liquid markets, making GMX a preferred venue for trading, hedging, and earning. GMX V2’s integration of Chainlink Data Streams for price data has significantly reduced the risks of front-running and price manipulation, further bolstering protocol security.
GM: ETH/USD [WETH-WETH] is a single-sided Liquidity Token on the GMX V2 platform and earns fees from multiple sources:
- Leverage trading (traders’ open and close fees/borrowing fees/and liquidations)
- Fees on buys and sells of the GM token
- Passive market-making by the AMM (price spreads)
More than $49 million in liquidity has been committed to GM: ETH/USD [WETH-WETH] by DeFi users, underlining the asset’s significant popularity.
Integrating single-sided GM: ETH/USD [WETH-WETH] as a collateral asset in Venus on Arbitrum has the potential to create new demand for borrowable assets on Venus. This liquidity token has a proven track record of being a low-volatility asset whose value does not fluctuate heavily compared to the broader market. The low beta properties of GM: ETH/USD [WETH-WETH] make it an ideal asset to borrow against.
Next Steps
We invite the Venus community to consider this application for listing the GM: ETH/USD [WETH-WETH] liquidity token and welcome suggestions and any related feedback.
Specifications
Ticker: GM: ETH/USD [WETH-WETH]
Contract Address: 0x450bb6774Dd8a756274E0ab4107953259d2ac541
Chainlink Oracle: 0xEAeFFF521cb36dFb414E8580f8635BFB44d96255
References
Project: https://gmx.io/#/
GitHub: gmx-io · GitHub
Docs: GMX | GMX Docs
Audit: gmx-synthetics/audits at main · gmx-io/gmx-synthetics · GitHub
Twitter: https://twitter.com/GMX_IO
Telegram: @GMX_IO
Discord: GMX
Disclaimer
This proposal is provided for informational purposes only and does not constitute any form of legal commitment or agreement between GMX, Venus Protocol, or any other parties. The listing and parameters for such allocation are subject to the approval and discretion of Venus Protocol. GMX or any other parties make no warranties or representations regarding the accuracy, completeness, or suitability of the information presented, and will not be liable for any losses, damages, or adverse consequences that may arise in relation to this proposal. All parties are advised to conduct their own due diligence and seek independent legal advice before making any decisions or commitments based on this proposal.
GMX DAO is supported by Labs as voted on in Snapshot: (Snapshot 7)