I’m Earning 98.94% APR on GLP (Steadefi & GMX Liquidity Providing)

Summary

The 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

00:00

🚀 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.

05:01

🔍 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.

10:03

🏦 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.

Keywords

💡Yield

Yield in the context of the video refers to the return on investment, specifically the annualized percentage return that an investor can expect from holding or trading a certain asset. It is central to the video's theme as the speaker discusses the yield earned from the GMX platform's GLP token, which is a significant draw for users looking to maximize their crypto investments.

💡GMX

GMX is a decentralized perpetual exchange platform mentioned in the script. It allows users to trade various cryptocurrency assets directly on the blockchain. The platform's decentralized nature is highlighted as a key advantage over centralized exchanges, especially in the context of regulatory crackdowns like those by the SEC in the United States.

💡Decentralized Exchange (DEX)

A decentralized exchange, or DEX, operates without a central authority and allows peer-to-peer transactions directly on the blockchain. In the video, GMX is described as a DEX, emphasizing its user-friendly approach that doesn't require KYC (Know Your Customer) information or account creation, which appeals to those concerned about privacy and regulatory issues.

💡Leverage

Leverage is a financial term used to describe the use of borrowed capital to increase the potential return of an investment. The video discusses how GMX allows traders to execute trades with leverage, meaning they can control a larger amount of assets than they actually own, which can amplify both gains and losses.

💡Liquidity Provider

In the context of the video, a liquidity provider is an individual or entity that supplies assets to a platform like GMX, facilitating trading by providing the assets that others trade against. They earn a share of the platform's fees and benefit from the appreciation of the assets they provide, which is a key aspect of the GMX ecosystem.

💡GLP Token

GLP is a liquidity token backed by a basket of assets such as Ethereum, Bitcoin, and stablecoins. It is used in the GMX platform to provide liquidity and is also the token that the speaker is discussing in terms of yield. Holding GLP essentially means providing liquidity for the assets it is backed by.

💡Borrow Fee

A borrow fee is the cost associated with borrowing assets from a liquidity pool or token, like GLP in the video. Traders who execute a trade using borrowed GLP tokens will have to pay this fee, which contributes to the yield earned by liquidity providers.

💡Steady (Studify)

Steady, also referred to as Studify in the script, is a platform that offers managed vaults for crypto investments. It allows users to deposit funds into vaults that automatically handle trading strategies, such as 3X long positions on GLP, providing an additional layer of service for those looking to earn higher yields with less effort.

💡Leveraged Position

A leveraged position is an investment technique where borrowed funds are used to increase the potential return of a trade. In the video, the speaker mentions a 3X long GLP position in a Steady vault, which means the investment is three times more sensitive to market movements than a regular position, offering higher potential returns but also higher risks.

💡Vault

In the context of the video, a vault refers to a specific investment strategy or fund managed by Steady. Users deposit their assets into these vaults, which then employ strategies like leveraging to enhance returns. The vaults mentioned include long GLP positions and delta-neutral strategies.

💡Delta Neutral

A delta-neutral position is a portfolio strategy that aims to be unaffected by small changes in the price of the underlying asset. The video mentions a delta-neutral vault offered by Steady, which is designed to provide returns regardless of market direction, offering a form of market risk mitigation.

💡Token

In the crypto context, a token is a digital asset that represents a particular utility or set of rights on a blockchain platform. The video discusses various tokens, including GLP and the incentive reward token from Steady, which can be earned by staking Vault tokens and may have a future value upon launch.

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

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and I'll see you guys in the next one

peace