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  1. GMD Delta-Neutral Strategy

Protocol's GLP Reserve (The Reserve)

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Last updated 2 years ago

Instead of trying to completely eliminate the market volatility of Risk 2 and 3 mentioned in , which is almost impossible, we simply decided to raise funds and create a reserve to absorb said risks.

=> We call it the Protocol's GLP Reserve (The Reserve), and it will come with the following functions and benefits:

Functions:

  • The Reserve will absorb the risk of Delta-Neutral Vaults underperforming due to impermanent loss by making up for the difference between the value of the Delta-Neutral Vaults' underlying GLP and users' staked assets.

  • The Reserve will always consist of an amount of GLP worth 5-15% of the total TVL of the three Delta-Neutral Vaults (If Vaults TVL is $2,000,000; there will be $200,000 worth of GLP in The Reserve).

Benefits:

  • Funds for The Reserve will be provided 100% by GMD Treasury.

  • The Reserve will also gain the $GLP's profits from traders' losses. In the long run, traders are statistically destined to collectively lose.

  • Based on the historical data of GLP's performance compared to Single-Assets, The Reserve is significantly more likely to financially benefit from the volatility.

=> Simply put, The Reserve is designed to take on more risks toward the protocol while obtaining more benefits and rewards for our users.

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Market Volatility Risks