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GLP Wars: Dominant Players and Strategies
Seth Zhuo
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Key Takeaways
14 min read
  • GLP's high base yield is dependent on GMX's resilience and innovation, demonstrated by its sustained growth after the end of the inflationary emission incentive schemes and the upcoming release of GMX v2.

  • GMX v2 introduces isolated LP pools, synthetic assets, and a new fee structure to reduce risk and increase trading capacity. GLP stakers can expect fees to grow.

  • The GLP wars landscape is dominated by GLP vault strategy protocols, with leveraged GLP vaults and delta-neutral GLP vaults being the most popular. The protocols with the largest GLP market share are Abracadabra & JonesDAO for leveraged GLP vaults.

  • Several protocols, including Steadefi, and Neutra Finance, are releasing new/updated Delta Neutral vaults. The existing Delta Neutral vaults are mostly fully subscribed and pending cap increase and these can be an available alternative.

  • Pendle Finance and Flashstake are emerging protocols that are bringing innovation to the GLP space with their yield and time-based derivatives on GLP, providing new strategies for users, including a yield arbitrage strategy using a combination of both protocols.

GMX: A Brief Introduction

GMX has been gaining significant traction among traders and investors as a result of the FTX collapse, which has prompted many to turn to decentralized exchanges for perpetual trading. GMX has also gained attention for its low swap fees, zero price impact, and exposure to a diversified index-like product, GLP.

GLP is the liquidity token of GMX, consisting of a basket of assets such as BTC, ETH, and USDC in an approximately 50% stablecoins and 50% volatile assets ratio. LPs can add liquidity by swapping their assets for GLP tokens via the minting process. GLP acts as a counterparty for traders on the GMX platform.

GMX's GLP model spearheaded the real-yield narrative which prompted users to generate yield...