Arbitrum DeFi Journey - GMX Farming And Crypto Perspectives

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Written by

#Club1BCH

1 year ago

In community: Club1BCH(4ac4)

Topics: Arbitrum, GMX, USDC, Ethereum, Defi, ...

We leave footprints on the blockchain with every transaction we do. The journey into the Cryptoverse is different for all, but most follow the same dreams. We want passive income, profit, our assets to skyrocket in value, and if possible ... to land some juicy airdrops!

I landed on Arbitrum after the Across Ape Into Arbitrum campaign, an educative deep dive into the chain, highlighting hidden gems and projects with great potential. Across is the top choice for bridging crypto between Ethereum mainnet and layer-2s such as Polygon, Optimism and Arbitrum, Base and zkSync, being secure, fast and financially efficient.

Arbitrum is an Ethereum Layer-2 scaling solution that supports smart contracts without the limitations of scalability and privacy. The chain become popular due to low transaction fees and less congestion than mainnet, and FOMO and hype were added in the mix when the token airdrop rumors started.

I learned, earned some prizes, claimed NFTs and explored a new chain! On top of that... I done enough to be eligible for the Arbitrum ($ARB) airdrop! I ticked the bridging criteria, thanks to Across Protocol, and done several transactions over time. Most of them were on Harvest Finance (Dolomite) and claiming NFTs on Galxe.

More points were given for transaction frequency and interaction, and I've conducted more than 25 transactions or interacted with more than 25 smart contracts. I always said that consistency is the key to success! I was eligible for 2250 $ARB tokens, due to my activity on Arbitrum, and this was massive!

The airdrop made me give more attention to the opportunities available on Arbitrum, and I soon explored GMX! I discovered that GMX doesn't trade tokens, as users will deposit collateral to take long or short positions. The traders will be paid in USDC as settlement profit for shorts or the pair token for longs.

Deep-dived into the tokenomics and learned about $GMX and $GLP, and how the community-operated ‘unionized' liquidity pool (GLP Pool). The $GLP token is in fact an index used to provide liquidity for leveraged trading, which can be bought with any of the assets that are in the LP. The fee depends on the liquidity pool demand, being cheaper to buy GLP with index assets that are demanded by the market but are underrepresented in the pool.

The $GMX is powering the ecosytem, and shares 30% of the accrued platform's generated fees to the holders, while GLP holders will share the remaining 70% of the generated fees. Which of them is a better token to hold?

Swapped some assets and bough two batches of GLP, each time under one dollar, and started to earn passive income. The $ETH rewards kept adding up, and the stress free farming made me explore GMX staking. Was time to up my game on Arbitrium.

Got another slice of GLP, after Bitcoin started to go downhill, and sold it for about 10% profit just a week later. I was ready to buy GMX and earn ETH by staking the tokens. Single staking will always be my favorite, as impermanent losses are a horrible thing!

My goal was to get 5 GMX and spend the rest on some tokens with good potential. HODL mode to be activated after, and watch the market go up and down without worries.

I am happy I didn't bought when the $GMX prize was close to 80 dollars, and that patiently waiting for the price drop gave me a top deal. Bought 5 GMX for less then $350, and used the profit from the $GLP to buy $ARB tokens at $0.99 during bearish times.

Staked the 5 GMX tokens, and started earning rewards at 5.68 APR, along with better rewards from the remaining pot of $GLP. Looking at the dashboard, I wandered what the "Boost Percentage" is... and how to boost it up!

I done my research and explored the two options I have for the rewards, compound or claim. Compounding will stake the pending Multiplier Points and Escrowed GMX rewards, and this process will increase the amount of rewards you receive.

Claiming will transfer any pending Escrowed GMX rewards and ETH rewards to your wallet. Each staked Escrowed GMX token will earn the same amount of Escrowed GMX and ETH rewards as a regular GMX token. My GMX was staked not escrowed, so no esGMX for me, and no waiting one year for the rewards to vest. The bear market and crypto volatility is good for rewards, as the trading activity brings bigger APR. I accumulated 0.0118 ETH in two months, and 0.6295 Multiplier Points.

The rewards were good enough and decided to compound. One click and the smart contract does the hard work, including claims, stakes and the automatic conversion of wETH into ETH. Staking the Multiplier Points will increase my gains, as the system was designed to reward long term holders without inflation.

When you stake GMX, you receive Multiplier Points every second at a fixed rate of 100% APR. As an example, if you stake 2000 GMX one year ... you would earn 1000 Multiplier Points.

The multiplier points are burned when GMX or Escrowed GMX tokens are unstaked. The burn will apply to the total amount of Multiplier Points which includes both staked and unstaked Multiplier Points.

This system was mind blowing, and took me a while to fully understand it. The "Boost Percentage" shown on the Earn page shows the personal boost amount from Multiplier Points. If the general APR is 10% and the multiplier points are equivalent to 20% of the total GMX staked, then the Boost Percentage will be 20% extra ETH rewards. The “Boost Percentage” is calculated from the ratio of Multiplier Points to the total amount of staked GMX. Every point will make a big difference, and having staked multiplier points helped me to earn more $ETH and even more points. Two more months and another batch of rewards compounded, adding 0.012 ETH in my wallet and 1.1315 extra staked points.

The Arbitrum DeFi summer was great, and claimed one more batch of rewards at the end of September. Only 0.0081 $ETH farmed and claimed this time, but much more Multiplier Points. I compounded 2.4 points and reached 4.5 staked multiplier in few months, making a fair amount of profit from the staked GMX!

Speaking about a fair profit... you remember the ARB I bought when the value first dipped under one dollar? Sold them all when the price reached $1.30 and bought back when it dived down to 81 cents. It's one of the odds times when I sold close to the peak and bought close to the bottom.

I initially bought 174 ARB tokens from the GLP profit then got a good deal when I sold in July. Having USDC in the bank is great, and this helped me boost my $ARB holdings with more than 100 tokens. Spent the USDC reserves in September and raised my stash to 280 ARB tokens. It feels like it's always DeFi summer on Arbitrum!