💧Providing Liquidity (Todo)
Smart contracts, links, audits
Overview
GLP consists of an index of assets used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset. The price for minting and redemption is calculated based on (total worth of assets in index including profits and losses of open positions) / (GLP supply).
ALP Token Address
PUT LINK HERE once contract deployed
Note that GLP is specific to the network you mint it on, it is not directly transferrable between networks and the price, ETH / AVAX rewards for the tokens will differ between networks.
As GLP holders provide liquidity for leverage trading, they will make a profit when leverage traders make a loss and vice versa. Past PnL data, GLP price chart and other stats can be viewed on https://stats.gmx.io.
Token Balances and Pool Ratio
| TOKEN | Target ratio | Min ratio | Max ratio |
|---|---|---|---|
jitoSOL | 45% | 35% | 55% |
WBTC (wormhole) | 20% | 10% | 30% |
BONK | 5% | 2.5% | 7.5% |
USDC | 30% | 20% | 40% |
Buying GLP
GLP tokens can be bought using the Buy GLP page.
Options to bridge funds to buy the tokens can be found at the bottom of the Buy page.
ETH / AVAX is also required to send the buy transaction.
Any of the GLP index tokens can be used to buy GLP, a list of the index tokens can be found on the Dashboard.
Fees will be lower for tokens that the pool has less of, check the Save on Fees section to get the lowest fees.
After buying your GLP tokens will automatically be staked and you will start earning Escrowed GMX and ETH / AVAX rewards, you can check your rewards on the Earn page.
Selling GLP
GLP tokens can be sold using the Sell GLP page.
Token Pricing
There may be a spread for some index tokens, minting GLP will be based on the lower value of the index token and redeeming GLP will be based on the higher value of the index token.
For stablecoin tokens, the spread will be from the Chainlink price of the stablecoin to 1 USD.
The price of GLP will depend on the spread of the tokens in the pool as well.
Token Weights
The fees to mint GLP, burn GLP or to perform swaps will vary based on whether the action improves the balance of assets or reduces it. For example, if the index has a large percentage of ETH and a small percentage of USDC, actions which further increase the amount of ETH the index has will have a high fee while actions which reduces the amount of ETH the index has will have a low fee.
The token weights can be seen on the Dashboard.
Token weights are adjusted to help hedge GLP holders based on the open positions of traders. For example, if a lot of traders are long ETH, then ETH would have a higher token weight, if a lot of traders are short, then a higher token weight will be given to stablecoins.
If token prices are increasing, then the price of GLP will increase as well, even if there is a larger number of open long positions on the platform. The portion reserved for long positions can be treated as stable in terms of its USD value since if prices increase the profits from that portion will be used to pay traders, and if prices decrease, the losses of traders will keep the USD value of the reserve portion the same.
If a lot of traders are short and larger weights are given to stablecoins, then GLP holders would have a synthetic exposure to the tokens being shorted, e.g. if ETH is being shorted then the price of GLP will decrease if the price of ETH decreases, if the price of ETH increases then the price of GLP will increase from the losses of the short positions.
Risks
Caution should be exercised when interacting with any smart contract or blockchain application. While risks are attempted to be mitigated through testing, audits and bug bounties, there is always a risk of vulnerabilities in smart contract code.
For details of contract operation please see Contracts V1.
A non-exhaustive list of risks:
Smart contract risks
Counterparty risks: The GLP pool is the counterparty to traders, if traders make a profit that comes from the value of the GLP pool
Token risks: Bridged tokens may depend on the security of the bridge, pegged tokens have risks of depegging
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