I’m Earning 98.94% APR on GLP (Steadefi & GMX Liquidity Providing)
Summary
TLDRThe video discusses GMX, a decentralized perpetual exchange for trading cryptocurrencies like Bitcoin and Ethereum without centralized exchange risks. GMX's GLP token allows users to earn yield by providing liquidity for trades. The presenter shares their experience with Steady, a platform offering managed vaults, including a 3X long GLP position for higher yield potential. Despite market volatility, the presenter remains optimistic about the platform's potential, especially its delta-neutral vaults, and mentions upcoming rewards in the form of the Steady token.
Takeaways
- 🌐 GMX is a decentralized perpetual exchange platform that allows trading of various cryptocurrency assets directly on the blockchain.
- 🔄 Users can execute both short and long positions with leverage on GMX without the need for a centralized exchange like Binance or Coinbase.
- 🛡️ GMX's decentralized nature offers an advantage for users concerned about the SEC's crackdown on centralized exchanges and the associated uncertainties.
- 💼 KYC information and account creation are not required on GMX, promoting privacy and ease of use by allowing users to connect their wallets directly for trading.
- 💰 GMX operates a liquidity provider system, where participants can earn a share of the platform's fees and benefit from asset value appreciation.
- 🪙 The GLP (GMX Liquidity Provider) token is backed by a basket of assets including Ethereum, Bitcoin, Chainlink, Uniswap, and stablecoins, providing liquidity for traders.
- 📉 The yield on GLP has decreased from a high of 30-35% to around 13% annualized due to increased liquidity provision and reduced trading activity.
- 🚫 Risks for liquidity providers on GMX include exposure to the platform itself, market volatility of the underlying assets, and being the counterparty to all trades.
- 📈 Steadyfi offers managed vaults, including a 3x long GLP position, providing increased yield potential alongside increased market exposure.
- 🔄 Steadyfi's leverage vaults work by borrowing from lending pools to amplify positions, with automatic rebalancing to manage risk and maintain a debt ratio.
- 📊 The performance of the GLP vault on Steadyfi is closely tied to the price of GLP, with the yield being compounded into the vault token's value, providing an additional return on investment.
Q & A
What is GMX and what does it offer in the cryptocurrency market?
-GMX is a decentralized, perpetual exchange that allows users to trade different cryptocurrency assets directly on the blockchain. It enables trading with leverage for both short and long positions without the need for a centralized exchange like Binance or Coinbase.
Why might someone prefer using GMX over centralized exchanges?
-Some users might prefer GMX due to the regulatory crackdown on centralized exchanges by the SEC in the United States, which has created uncertainty in the crypto market. GMX provides an alternative for those looking to short the market or trade without the need for KYC information or account creation.
What is the role of liquidity providers in the GMX ecosystem?
-Liquidity providers in GMX offer capital to facilitate trades on the platform. They earn a share of the platform fees and benefit from the appreciation of the assets they provide liquidity for.
What is GLP and how does it function within the GMX platform?
-GLP is a liquidity token backed by assets like Ethereum, Bitcoin, Chainlink, Uniswap, and stablecoins. Holding GLP means providing liquidity for these assets. Traders borrow from the GLP pool to execute trades, paying fees and borrow costs.
What are the risks associated with being a liquidity provider for GLP?
-Risks include exposure to the GMX platform, market exposure to the assets backing GLP, and the risk of being the counterparty to all trades on the platform, which can affect the GLP price based on the gains or losses of traders.
What is the current annualized yield on GLP and how has it changed?
-The current annualized yield on GLP is about 13%. It used to be higher, around 30-35%, but dropped due to fewer people trading and more people providing liquidity.
What is Steadyfi and how does it relate to GMX and GLP?
-Steadyfi is a platform offering managed vaults for users to deposit and earn yield. One of its vaults offers a 3X long GLP position, providing increased exposure to the market and an increased yield, currently around 28% annualized.
How does the leverage position in Steadyfi's vaults work?
-The leverage position works by borrowing from lending pools to create a leveraged position. For example, a 3X long vault will borrow twice the amount deposited to create a position three times the size of the initial deposit.
What is the purpose of automatic rebalancing in Steadyfi's vaults?
-Automatic rebalancing is implemented for risk management, aiming to maintain a debt ratio of about 66%. If asset prices change, the system will rebalance to ensure the position stays within the desired debt-to-equity ratio.
What are Delta Neutral Vaults and how do they differ from other vaults?
-Delta Neutral Vaults, like the one offered for the Ethereum to USDC pool on Steadyfi, aim to be market-neutral, providing yield without direct exposure to market fluctuations. This differs from other vaults that may have direct market exposure.
What is the performance of the GLP Vault on Steadyfi over the past 60 days?
-The GLP Vault has experienced some fluctuations, with an initial increase followed by a decrease that is proportional to the performance of the GLP price itself. The yield is automatically compounded into the position, providing an additional return on investment.
Outlines
🚀 Introduction to GMX and GLP: Decentralized Trading and Yield Opportunities
The first paragraph introduces GMX, a decentralized perpetual exchange platform that enables on-chain trading of various cryptocurrencies with leverage. It discusses the platform's appeal amidst the SEC's crackdown on centralized exchanges, offering an alternative for traders to go long or short without KYC requirements. The paragraph delves into the liquidity provider system, the GLP token, and the associated risks and rewards, including the annualized yield on GLP and the platform's TVL. It also mentions the counterparty risks involved in providing liquidity and the historical performance of traders on GMX.
🔍 Steady's Managed Vaults and Leverage Strategies for Enhanced Yield
The second paragraph explores Steady, a platform offering managed vaults that simplify the process of earning yield on GMX's GLP token. It explains the 3X long GLP position vault, which provides increased yield alongside market exposure. The paragraph details how the vault operates, including leveraging funds from lending pools, the risk of liquidation, and the platform's risk management strategies such as deposit caps and automatic rebalancing. It also discusses the performance of the GLP vault, the impact of GLP's price fluctuations on the vault's value, and the annualized yield earned despite market volatility.
🏦 Steady's Performance and Future Prospects with Reward Tokens
The final paragraph reviews the performance of the GLP vault on Steady, highlighting the user's personal experience and the platform's funding contribution. It emphasizes the fluctuating yield and the compounding effect on the user's position. The paragraph also touches on the potential of Steady's delta-neutral vaults, particularly the 3X neutral Ethereum to USDC vault, and its market performance. Lastly, it mentions the upcoming launch of the Steady token and the potential rewards for staking Vault tokens, concluding with an invitation to join the creator's Discord for further insights.
Mindmap
Keywords
💡Yield
💡GMX
💡Decentralized Exchange (DEX)
💡Leverage
💡Liquidity Provider
💡GLP Token
💡Borrow Fee
💡Steady (Studify)
💡Leveraged Position
💡Vault
💡Delta Neutral
💡Token
Highlights
GMX is a decentralized perpetual exchange for trading cryptocurrency assets on-chain.
Traders can execute short and long positions with leverage without using centralized exchanges.
GMX's decentralization offers an alternative amid SEC crackdowns on centralized exchanges.
No KYC or account creation required for trading on GMX, enhancing privacy.
GMX operates through a liquidity provider system, sharing platform fees with providers.
GLP is GMX's liquidity token backed by a basket of assets including Ethereum and Bitcoin.
Traders borrow from GLP to execute trades, paying fees and a borrow fee.
Yield on GLP has dropped from 30-35% to around 13% annually due to increased liquidity.
Risks for GLP liquidity providers include exposure to GMX, market volatility, and being counterparty to trades.
Steadify offers managed vaults for simplified trading and leveraged positions.
Vaults like the 3X long GLP position provide increased yield with higher market exposure.
Steadify's leverage system uses lending pools to amplify positions while protecting the lending vault from market risk.
Automatic rebalancing in Steadify ensures a consistent debt-to-equity ratio for risk management.
Steadify also offers delta neutral vaults and other long vaults for diversified exposure.
The presenter's experience with a GLP vault shows a 5.5% loss, offset by accrued yield.
Yield from GLP vaults is compounded, providing automatic growth despite market fluctuations.
Steadify's delta neutral vaults, such as the 3X neutral Ethereum to USDC, show promising performance.
The presenter's outlook on Steadify is positive, with potential for growth and adaptability in the market.
Steadify's TVL is relatively low, indicating significant room for expansion and user growth.
Rewards in the form of the Steady token are offered, with an estimated launch price of 10 cents.
Transcripts
I'm earning 98.9 yield on glp from GMX
platform GMX is a decentralized
Perpetual exchange that allows you to
trade different cryptocurrency assets
directly on chain that means that you
can execute short and long positions
with leverage without having to go on a
centralized exchange like binance
coinbase or whatever the reason why you
might want to use a platform like GMX
instead of a centralized exchange is
because the SEC in the United States is
cracking down on centralized exchanges
and suing them so obviously a lot of
people are really uncertain about what's
going to happen in the crypto market and
maybe they want to short the market and
make some money so that's exactly where
they go to GMX a decentralized market
the reason why GMX is able to do this is
because they're completely decentralized
which means that you don't have to have
any kyc information you don't have to
create an account you don't have to do
anything you don't input money you input
cryptocurrency so if I wanted to execute
a trade here all I would do is simply
connect my wallet and then execute a
trade directly from my wallet now with
that being said GMX is not an entity
that's putting up a ton of capital for
users to trade they have a liquidity
provider system where people can provide
liquidity earn a share of the platform
fees and of course it's beneficial for
everybody liquidity providers make money
from fees as well as just assets rising
in value Traders make money from their
trades it's a win-win scenario take a
look at how that works they have
something called glp which is a
liquidity token it is backed by ethereum
Bitcoin link uni and some stable coins
so when you're holding glp in your
wallet you're essentially providing
liquidity for all of these assets that
were just listed and as a Trader when
you go and you execute a long or short
position you are borrowing from glp to
execute that trade and of course you're
going to pay normal fees for entering
and exiting a position as well as a
borrow fee for actually having to borrow
from glp now for a Trader the fees are
obviously pretty low but they start to
add up for those that are providing
liquidity currently the yield on glp is
about 13 annualized now the yield on glp
used to be a lot higher it used to be
around 30 to 35 percent but it
significantly dropped simply due to the
fact that not as many people are trading
but also there's more people providing
liquidity for glp so there are a few
risk that you're taking on as a
liquidity provider for glp number one is
obviously to the GMX platform but with
GMX having a tvl of over 580 million
dollars as was many audits from Top
auditing firms I'd say my personal
opinion exposure to the GMX platform
isn't too big of a risk your next risk
is obviously Market exposure tasks
that's like ethereum Bitcoin link uni
and stable coins but of course those are
all blue chip assets so in my opinion
not too much to worry about but if you
don't like ethereum if you don't like
Bitcoin then glp is simply not going to
be an asset for you and the other risk
you're taking on is being the
counterparty to all trades on the
platform so what that means is if I go
and I execute a long position right here
and I make let's just say a hundred
dollars well then I'm taking a hundred
dollars from the glp pool which pushes
down the glp price whereas if I lose a
hundred dollars then I'm putting a
hundred dollars into the glp pool which
pushes up the glp price so remember in
trading there's always a winner and
there's always a loser no in between
there is a counterparty and that's
exactly how the glp system works except
the liquidity pool is the counterparty
luckily for liquid the providers Traders
have historically lost the majority of
their trades on the GMX platform and
this is an amazing model don't get me
wrong but the yield used to be a lot
higher and more worth it so that's where
platforms like steadify come into play
studify is a platform that offers
managed vaults so essentially all you
have to do is deposit into one of their
vaults and they handle all the stuff for
you and one of their vaults that they
have is a 3X long glp position so
essentially you're on a leveraged glp
position which does mean increased
exposure to the market but at the same
time it means that you're getting an
increased yield so in this case you're
getting about a 28 annual yield in the
glp yield but you're also getting a
yield from steady tokens which is their
incentive reward token and how this
leverage position works is essentially
people can deposit in these lending
pools and then the leverage Vault will
borrow from The Lending Vault and use
that to leverage up the position so
let's just say there's a thousand
dollars in the lended vault ready to be
deployed and somebody decides to deposit
a hundred dollars into the long Vault
that's gonna be this Vault right here
where you get the leverage yield so
what's going to happen is the long Vault
will take its hundred dollars and it'll
take 200 from The Lending Vault to
create three hundred dollars a 3X
leverage position ultimately giving the
long Vault exposure to 300 worth of glp
but the thing is the long Vault absorbs
all the price movements which means if
the price does decline about 33 the
position will be sold and liquidated
that way the lending Vault does not
incur any price action because with the
lending Vault the goal is to have no
risk obviously the risk that you have is
platform risk to statify in the case
they get exploited or something along
those lines but as far as Market
exposure goes the lending Vault will not
have any risk the way they're able to
keep that in line is a deposit cap so as
you can see with the lending Vault there
can be a total of two hundred thousand
dollars deposited whereas with the long
Vault there can only be sixty two
thousand dollars deposited and that's in
order to make sure that they have enough
funds to be 3x leveraged now something
else that's implemented in this platform
is automatic rebalancing for risk
management now ideally they want the
debt ratio to be about 66 which
basically means that 66 percent of the
position is debt whereas the other 34
percent is just capital posited into
this platform so for example this Vault
has total assets of about 106 000 glp
65.7 percent of that is debt from The
Lending pool now in the case that asset
prices change then what's going to
happen is it's going to rebalance back
to 66 percent so it might go and it
might borrow more or it might go and it
might borrow less the rebalances are on
61 and 69 now the other cool thing that
certify offers is delta neutral vaults
as well as just other long vaults on
liquidity pools so for example if you
wanted to leverage up on a liquidity
pool like ethereum to usdc you could do
so with statify pretty cool concept but
let's go and take a look at the
performance of this glp Vault because
I've been deposited for about 60 days
now and I do want to go and give you
guys a full disclaimer the certified
team did fund my deposit but that's all
they funded I deposited the full amount
that they paid me into this platform as
you guys probably know by now I wouldn't
be making a video on setify if I didn't
believe in it and if I didn't have faith
for their platform now there's two
different metrics that I want you to
look at here number one is this green
line and number two is the very light
gray line the light gray line represents
the glp price and the green line
represents the Vault price so that would
be the current 3x long glp price now as
you can see the position has been
performing as expected it's been
following the price of glp but it also
has that additional yield in the token
another thing I want to mention is the
yield tier is accrued in the price of
the 3x long glp token So currently the
Vault token is worth
96.6 cents that means that the yield is
stored in that price so in the case that
there are no price fluctuations for glp
the price of three long glp is going to
continue to go up over time as the yield
is paid out so that basically means that
your position is automatically
compounded now as you can see as soon as
this Vault started the price went up a
decent amount but then it went down a
lot since then however that is
proportional to how the glp price has
performed so I wouldn't say that that's
a vault issue more of a glp issue and as
I said I had a 1 000 deposit into this
platform and I currently down about 60
overall so I currently have about 940
dollars so when I enter this position
the three glp price was about a dollar
dollar and two cents and now it's
currently just under 97 cents which
means I've lost about 5.5 percent on my
overall position which isn't too bad so
remember this is a 3X leverage position
if I were to go ahead and just enter
into glp instead of entering into this
position I would only lost 2.32 so in
this case obviously it would have been
better to hop into glp but keep in mind
if the roles were reversed meaning that
glp went up in price I would be up 5.5
percent and glp would only be up 2.3
however one thing I want you to keep in
mind is the yield that I've got so if
you were to go ahead and just multiply
the price action by three you would be
down about seven percent in the case
that you just had a 3X leverage position
to glp and you weren't earning any yield
because it is kind of hard to track the
yield since it is automatically
compounded back into the position but
remember we're only down about 5.5
percent which means that we had at least
1.5 percent in yield and I've been in
this position for 57.7 days and if you
go ahead and just divide the yield by
the days that I've been in this position
and then multiply by 365 that shows that
we're getting about 9.5 annualized yield
which obviously is less than this 28
projected yield but we do have to keep
in mind that sometimes the yield is
lower than 28 other times it's higher
than 28 meaning that sometimes we're
earning a very low yield other times
we're earning a very high yield so it
probably averages out to about 15 to 20
percent and that ideology isn't just for
the studify platform that ideology is
for any platform that you're depositing
into as long as the yield is fluctuating
sometimes you're going to be earning a
lower yield other times you'll earn a
higher yield but you also have to keep
in mind that we did earn a portion of
this yield when our Capital was a higher
amount which means when the capital does
see a decline this yield is portrayed as
lower because if we're getting a 10
yield on a thousand dollars that's an
easy math equation that's just a hundred
dollars worth of yield and then say
that's automatically compounded back in
the position to equal eleven hundred
dollars and then our Capital declines
let's just say five percent so if you do
the math the yield that you accrued
would now be worth ninety five dollars
instead of 100 which is only nine point
five percent as opposed to the 10
percent that we actually earned with
that being said I do have hope in this
pool and I do think it will perform well
as the market starts to perform better
if it doesn't then I am going to exit
this pool and enter into one of the
other vaults that studify offers on
their platform because from what I can
tell their delta neutral vaults are
doing very very well especially this 3x
neutral ethereum to usdc Vault if you
look at the price action over time it
initially started at one dollar it's
currently at a dollar and one cent it's
up about 1.35 since Inception and
obviously you could see the APR over
time it started about 65 percent and now
it's currently about 27 but 27 on a
completely Market neutral pair is really
really nice and while 28 is the current
projected yield if you go ahead and take
the average of this data so far this is
projecting to be about 55 annualized so
it could perform better than
expectations but do keep in mind that
the APR was higher at one point in time
so I imagine it will average out to
around 30 annualized over the course of
time as this yield starts to fluctuate
that being said I do think that cetify
is a pretty cool platform and they have
a ton of room to grow considering their
tvl is only about six hundred thousand
dollars and the other thing I want to go
and mention is they are offering rewards
in as steady if you do stake your Vault
tokens and currently as steady and
steady token do not have a price which
means that when it launches it could be
less than this additional yield that
you're getting or it could be more now
the team is estimating that the S steady
and the steady price is going to launch
at about 10 cents but that is subject to
change once again it could be higher it
could be lower well that being said the
actual yield that they are giving you is
100 real yield not based off a reward
token it's derived straight from gmx's
glp token hope you enjoyed this video if
you did make sure to drop a like
subscribe notifications turned on all my
portfolios are public in my free Discord
down below inscription so check that out
and I'll see you guys in the next one
peace
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