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Governance

Overview​

The GMX_DAO token governs the GMX DAO. Its introduction represents a significant evolution of the previous GMX governance mechanism. It completes the implementation of a transparent, fully on-chain voting system that includes delegation services.

This on-chain governance system for the protocol further decentralises the governance structure and decision-making processes, while strengthening community involvement within the GMX ecosystem.

Staking and Voting Power​

To be eligible to participate in GMX DAO governance, users need to stake their GMX (and esGMX) tokens in the Earn section of the GMX Dapp. Once the tokens are staked, users will receive GMX_DAO tokens in a 1:1 ratio. With these tokens, users can engage in governance by voting on proposals themselves or electing a delegate to vote for them.

Essential things to consider before staking:

  • Unstaked GMX cannot be used to vote on governance proposals. The tokens must be staked first to receive GMX_DAO tokens with governance power.
  • When users unstake their GMX and esGMX tokens, they will lose their Voting Power in GMX governance.
  • If a user has not delegated their tokens on the Governance platform Tally.xyz (either to themselves or to a delegate), they won't be able to utilise the Staking, Claiming or Compound features in the GMX Dapp.

How to nominate yourself as a delegate​

Step 1: Complete the delegate statement on the GMX Governance forum. The delegate statement can be seen as an ‘application form’ that gives the community an idea of your experience, talents, and potential contributions to the GMX Protocol.

Step 2: Go to https://www.tally.xyz/. Tally is a governance front-end for on-chain DAOs.

Step 3: Search for GMX and click on the first option. This will take you to: www.tally.xyz/gov/gmx

Step 4: Connect your preferred wallet to Tally, and make sure your wallet is connected to Arbitrum. If you are a new user on Tally, you will need to create a new profile. If you have already used Tally, however, your profile should show up.

Step 5: As the next step, you should delegate your tokens to nominate yourself as a GMX delegate. Click 'My Voting Power' on the right side of your screen:

Step 6: After clicking on 'My Voting Power', you will be redirected to a new page. Here, you will need to click on 'delegate.' You have two options: you can delegate the tokens to yourself or to another wallet. If you wish to nominate yourself with the connected wallet, click on the 'Myself' option. If you want to concentrate the voting power in a wallet other than the one connected, click on 'Someone else' and enter the wallet address where you want to receive the delegated voting power.

Step 7: Once the process is complete, your name will appear on the GMX DAO landing page alongside the names of other delegates who have nominated themselves.

How to delegate tokens to other delegates​

If you are a GMX token holder yet are unable to actively participate in DAO activities, you have the option to nominate a delegate from the community to represent you and vote on proposals for you.

However, before delegating your voting power, please note that you're trusting someone else to vote on your behalf. It's crucial to choose a delegate whose values align with yours and whom you trust to make decisions in the best interest of the GMX DAO and its community.

Step-by-step guide on how you can delegate your tokens:

Step 1: Navigate to the GMX Dapp.

Step 2: Click on the Earn page in the header menu.

Step 3: To proceed, click on Stake. Once your GMX tokens are staked, your Voting Power will show in the form of GMX_DAO tokens:

Step 4: Click on the delegate button to go to the GMX DAO landing page on Tally.

Step 5: Connect your wallet to Tally (and make sure your wallet is connected to Arbitrum). If you are a new user on Tally, you will need to create a new profile. If you have already used Tally, however, your profile should show up.

Step 6: You should see a few ‘Rising Delegates’ highlighted on the landing page. Click the ‘Explore all delegates’ button underneath this section, view all the available delegates, and find the one you’re most comfortable delegating your voting power to.

Step 7: You can delegate your tokens by clicking the ‘Delegate’ button next to your chosen representative, or you can click on 'My voting power' if you want to actively manage your voting power yourself. In the latter case, click 'Delegate' on the My Voting Power page.

You will have two options here: to delegate the tokens to yourself or someone else. If you choose 'Someone else,' you will need to enter the wallet address of the delegate to whom you plan to delegate your voting power.

Step 8: Once you click 'delegate,' wait for the transaction to be confirmed. Your delegation will be completed once the transaction is successfully confirmed on the blockchain.

It is possible to change your delegation on Tally later on if so desired.

Proposals to the GMX DAO​

Submitting a proposal to the GMX DAO follows a structured process, outlined below:

Phase 1: Ideation

In this initial stage, the author seeks community feedback on their concept. Unique ideas can be tagged with #idea on the GMX governance forum, where they will have a dedicated discussion thread.

Phase 1 proposals are typically informally brainstormed in settings such as Discord chats or Telegram groups. This phase may involve garnering community endorsement for the specifications of a future Request for Comment (RFC) through multiple Telegram polls.

Duration: Open

Phase 2: Request for Comment

During this stage, authors of proposals can formally seek community input by shaping their idea into a Request for Comment (RFC) using the provided template (Link pending DAO Approval).

Throughout the drafting process of the RFC, the author is expected to integrate community feedback and refine the proposal accordingly. The status of Draft RFC aims to accumulate sufficient feedback and endorsement to establish a soft consensus, thereby enabling the progression to a formal proposal with reduced risk of immediate rejection.

Proposal Format:

  • Summary
  • Motivation
  • Rationale
  • Specifications
  • Conclusion

Duration: Open

Phase 3: Snapshot Voting

Snapshot allows a flexible range of voting options which is not possible in Tally.

Voting power for Snapshot is based on token balance which allows for coverage of a larger percentage of the GMX community.

Voting mechanism: Simple majority (requiring 50% + 1 of the smallest token unit)

  • Quorum: TBD
  • Minimum token threshold for submitting proposals: 10,000
  • Voting window duration: 5 days

Upon Phase 3 completion, the proposal can transition to a GMX Improvement Proposal (GIP)

If a vote passes on Snapshot, and a GMX DAO delegate is against the results of the vote, the delegate should initiate a veto proposal on Tally as soon as possible.

Phase 4: GIP Proposals

If an on-chain transaction is required, GIP proposals can be submitted to the governance platform Tally for execution.

The GIP proposal should include a title, a clear description of its proposed actions, and take into account the following criteria:

  • Voting mechanism: qualified majority (65% + 1 smallest unit of a token)
  • Quorum: click to view on Tally
  • Minimum token threshold for submitting proposals: 30,000
  • Voting period duration: 5 days
  • Execution period: 48 hours
  • Cooldown period: None

The minimum number of tokens required to propose a GIP can be increased depending on voter turnover and the DAO’s total voting power, if desired.

Actions that are follow-up implementations of proposals that were already previously approved on Snapshot, can be done without a new Snapshot vote.

GMX DAO delegates on Tally are expected to vote “For” proposals that have already passed the Snapshot vote, unless there was a veto proposal or there is a particularly strong reason to vote against the Tally proposal.