About GMD Protocol Coin
GMD Protocol Coin is a yield optimizing and aggregating platform built on top of existing applications and GMD’s reserve token on Arbitrum. GMD employs delta-neutral or pseudo-delta-neutral strategies to aggregate yields from an index pool or an LP to its constituent individual assets, eliminating their risks of impermanent loss or exposure to unwanted assets.
GMD’s first products are single-stake (BTC, ETH, USDC) vaults built on top of GMX and GLP. GMD’s reserve will earn yield from underlying backing $GLP and all revenue from single-stake vaults. In the future, besides yield-earning vaults, GMD also aims to leverage derivative platforms through smart vaults (long, short, news trading, social, etc..) and arbitrage pegged assets.
GLP, GMX Strategy
GMD Protocol’s single-stake vaults use what they call a pseudo-delta-neutral strategy, meaning single-stake assets ($USDC, $ETH, or $BTC) will be allocated and adjusted to the same weight as GLP’s composition. These assets will be used to mint $GLP and earn yields from $GLP yields. As the market moves, the vault’s exposure to these assets are hedged against GLP’s volatility as they both have the same composition.
The composition will be rebalanced weekly by the protocol following market movement to ensure hedge parameters. For example, if GLP consists of about 50% stables, 33% ETH and 17% BTC, a vault of $1,000,000 in asset value will consist precisely of $500,000 USDC, $330,000 worth of ETH and $170,000 worth of BTC. This would satisfy our pseudo-delta-neutrality condition.
$GMD Reserve
It is too complicated/impossible to completely and perfectly hedge against the volatility of the cryptocurrency market, as the aforementioned factors are too unpredictable for any model. Even the most sophisticated strategies, such as employing shorts/AAVE borrowing, have shown to be effective, but never perfect. Moreover, the volatility has been shown in favor of $GLP favor as traders’ loss has out weighted other factors so far.
$GMD Tokenomics
$GMD will be your government token backed by a yield-generating reserve:
- $GMD will be introduced to the market through minting with $USDC.
- All $USDC used to mint $GMD will be converted to yield-generating assets to produce yields for $GMD holders.
- $GMD holders also earn revenue across vaults and applications on the platform.
Mint and Supply
$GMD will be minted with a supply cap on mint days. The team will decide to increase the supply cap and open mint days based on the demands from the market. Demands are monitored through $GMD’s price relative to its backing assets and how quickly is minting cap filled on mint days. Whitelisted members will be able to mint at a discount on the first day. Mint price and number of tokens to mint will be decided on based on market price on mint day.
Numbers for future mint days depend on demand for $GMD and your revenue from vaults. Every new mint day/supply cap increase has a more expensive mint price than previous ones. Therefore, minting can be opened only when the market price is over the last mint price. Mint price is always at a small discount against market price but minted tokens will be vested for 5 days.
Why Choose GMD Protocol Coin?
Future mint supply will be decided based on the market’s demand and the expansion in revenue. For example, if the market prices $GMD at 1.5$ with a 1$ backing, and the total yield from revenue >50% APR, your team will increase the cap for another 100,000 tokens to be minted at 1.35$, increasing the reserve and calibrating the yield to an estimated 30-40% apr.
If market prices $GMD below the last minting price, the contract will not allow to raise $GMD’s supply cap. 100% of the reserve from future mints WILL be converted to yield-generating assets. For the time being, GLP is your main strategy, and this aim to keep the supply equal to 1/10 of the single-stake vaults’ total value locked.
