Proposal Summary

Following the community discussion and the Snapshot vote, the DAO approved funding the GMX Labs budget for 2026–2027. This proposal seeks formal on-chain authorization via Tally for a two-year funding framework covering operating expenses and contributor token grants. The framework uses a revenue-based floor and ceiling to ensure operational stability, fiscal discipline, and responsible use of the strengthened DAO treasury following the 2024–2025 mandate.

Building on 2024-2025: During the previous two-year period, GMX Labs demonstrated operational efficiency by maintaining lean direct operations at $9.4M over two years supporting full protocol development and maintenance (with $19.4M total over two years including contributor tokens and other key DAO expenses), while generating $80.6M in protocol proceeds over the period (~$40M annually) and contributing $21.5M net to the DAO treasury. Additionally the bonding program successfully raised $4.2M in accumulated balance during this period, complementing the broader treasury-strengthening efforts.  

This Proposal Requests

1. Two-year authorization to use V2 protocol fees for operations

2. Two-year continuation of the contributor token grant program 

Labs & DAO Context

• GMX DAO predates GMX Labs

• In October 2022, the DAO approved GMX Labs as its service provider

• Labs operates under DAO oversight and is mandated to:

  • Develop and maintain protocol code

  • Administer delegated DAO responsibilities

  • Secure and manage protocol IP

  • Contract contributors and vendors

Funding Requests

1. Contributor Token Allocation

Request:

• 250,000 GMX over ~25 months (Dec 2025–2027)

• Linear distribution (~10,000 GMX/month)

• ~1.9% of total supply

Rationale:

• Aligns contributors with long-term protocol success

• Retains experienced contributors

• Continues a compensation model used since inception

Historical Context:

• Years 1–4: ~3.8% of supply

• Years 5–6 (proposed): +1.9%

• ~5.7% cumulative over six years

• No founder allocation, no pre-mine, community-first distribution

2. Revenue-Based Operating Funds

Source: Unallocated 10% share of V2 protocol fees (net ~8.8% after Chainlink)

Annual Floor: $7MAnnual Ceiling: $9M

Mechanism:

• If revenue < $7M → DAO reserves supplement the shortfall

• If revenue $7M–$9M → funded directly from protocol fees

• If revenue > $9M → excess retained by DAO treasury

Key Properties:

• Predictable funding across market cycles

• Enforces fiscal discipline in bull markets

• Automatically returns surplus value to the DAO

Rationale for Floor & Ceiling

• $7M Floor: Ensures continuity of core development, security, infrastructure, and legal/compliance operations across market downturns.

• $9M Ceiling: Prevents unchecked budget growth, maintains GMX’s lean operating model, and returns excess fees to the DAO for grants, strategy, and reserves.

This range supports ~30–40 contributors while preserving efficiency.

Automatic 1-Year Review

At the 1-year mark, funding is automatically reviewed if either condition is met:

• GMX 30-day TWAP is below the starting price, or

• Protocol revenue fails to meet the $7M floor and treasury funds are used

Review scope includes operating fees, contributor token grants, and the bonding program (if active). The DAO may modify, continue, or terminate components via governance vote.

Team & Commitments

• Current contributors: ~30

• Planned capacity: up to 35–40, market- and security-dependent

Labs commits to transparency, professional standards, smooth governance-directed transitions, and regular reporting to the DAO.

Implementation

• The Labs team will use an existing bond proceeds multi-sig 0xea8a734db4c7ea50c32b5db8a0cb811707e8ace3

• DAO seeds a one-time $2M buffer (~quarter runway)

• Net protocol fees flow to the Operational Multisig; Labs may draw funds within the approved $7–9M annual range

• Excess fees above $9M are returned to the DAO treasury (end of 2027 or earlier by DAO vote)

• If fees and buffer are insufficient to meet the floor, Labs will submit a supplemental Tally proposal

• If authorization expires, the multisig and all remaining balances remain DAO propert

Requested Action

Approve GMX Labs funding for 2026–2027, including use of V2 protocol fees with a $7M annual floor and $9M annual ceiling, distribution of 250,000 GMX to contributors over ~25 months, and use of the DAO-owned multi-sig  0xea8a734db4c7ea50c32b5db8a0cb811707e8ace3 with a one-time $2M buffer and a 1-year review mechanism.