Future HMX trading and HLP incentives

Community Discussion & Proposal
1

I have been reflecting a lot on how excellent the HMX trading platform is and how disappointing the token’s price performance has been, largely due to what I see as a poorly designed incentive program that ended up being counterproductive. While we’ve recently voted in a new program to address these issues, I wanted to open up a discussion about future incentive structures and how we can create more sustainable rewards going forward.

Specifically, I’d like to explore the idea of eliminating future HMX token-based incentives and replacing them with rewards distributed in USDC. For instance, USDC fees could be shared with traders and HLP holders instead of relying on HMX tokens.

Here’s why I think this could work: It’s estimated that about 90% of traders sell their HMX rewards for USDC anyway. If that’s the case, why not just reward them directly in USDC? This would reduce the constant sell pressure on the HMX token.

This way, traders get the rewards they prefer, while HMX holders benefit from a stronger, more stable token that’s not weighed down by persistent sell pressure.

As an HMX holder myself, I’d gladly trade a slightly lower APY for a token with stronger long-term potential. It feels counterproductive to have a higher APY on a governance token that continually depreciates in value due to sell pressure.

I don’t have specific numbers in mind yet, but I’d love to hear what others think about this idea and start a productive conversation about better incentives for the future.

4 Likes
2

Hey Hmxdegen, thanks for sharing your thoughts, really appreciate your commitment. We totally get the frustration with the token’s price action, and that’s why we released a new tokenomics which has been voted.

I personally think your idea about switching rewards to USDC makes a lot of sense. That said, I do wonder about the smaller group of people who might still prefer getting their rewards in HMX to build a bag and hold. Maybe there’s a way to offer both options? Like having a checkbox or something for those who want their rewards in HMX instead of USDC.

We’d love to hear more opinions on this. We’ll share your proposal on Discord and make sure to pass them along to the council members. :wink:

3

hello, if that person wants to hold HMX then he should just swap it, that way we can push also push the token’s value.
just by giving them checkbox doesn’t mean they truelly will not dump it.
it’s like clicking “Agree” to a very long rules and agreement but not really reading the whole message.

4

The selling pressure comes directly from the rewards being tied to the emission of esHMX tokens. This makes it difficult for us to only distribute USDC without selling HMX since a part of the rewards requires HMX emission.

That being said, we’ve recently proposed a new tokenomics model that addresses this issue, among others, and it has already been voted on. We encourage you to review it as it introduces significant changes in this area.

Thanks for sharing your thoughts!