Unlocking new ways of passive income Let’s talk about the index token GLM

Author: NingNing, independent researcher Source: X, @ 0xNing0x

Passive trading + passive income is a good strategy to capture the beta income of the upcoming super bull market in the crypto market during the year.

There are currently two popular ways to enhance passive income on the chain:

--Deposit ETH to LRT project points can capture ETH Staking income, EigenLayer points and participating LRT project points;

--Perps DEX LP's leverage/neutral strategy , which can capture LP fee income, potential increases in LP underlying assets, token rewards from Perps DEX and token rewards from the LP strategy platform.

Pendle currently prices the potential passive yield of Etherfi's eETH at 34.58%, KelpDAO's rsETH at 34.50%, and Renzo's ezETH at 41.41%.

Perps DEX LP’s leverage/neutral strategy yield rate, we take Arbitrum’s ecologically active Vaultka @Vaultkaofficial as an example, which provides GMX V2 LP token The APR return rate of the currency GM leverage strategy is 121.67%, and the APR return rate of the neutral strategy is 111.98%.

Compared with depositing ETH into LRT projects to earn points, the Perps DEX LP leverage/neutral strategy not only leads in yield, but also has principal diversification, It has advantages in terms of income autonomy and exit liquidity.

But unfortunately, the narrative popularity of LRT is now Max, and in the early days of the bull market, the market consensus is unlimited Bullish ETH's potential rise and the new assets EigenLayer and the protocol tokens of the LRT project future valuation.

To a certain extent, depositing ETH into the LRT project to earn points is an active income strategy disguised as a passive income strategy.

Perps DEX LP’s leverage/neutral strategy has a stronger flavor of passive income. This type of agreement is also more focused on how to better increase passive income, rather than hyping up narratives and issuing new assets.

Vaultka is an example. It developed GM's enhanced income index token GLM based on the ERC-4626 token standard, achieving re-diversification of asset allocation. At the same time, it inherits GM’s high capital efficiency and strong value capture capabilities.

ERC-4626 is a standard application programming interface for DeFi protocol vaults, providing deposits, withdrawals, redemptions, converting shares, reading balances, etc. Common function methods for treasury management.

GLM, as an ERC-4626 standard treasury token, is represented by a total of 80% of the LP of the GMX V2 BTC-USDC trading pair and the ETH-USDC trading pair. CoinGM+ consists of a total of 20% ARB-USDC trading pairs, UNI-USDC trading pairs and LINK-USDC trading pairs.

Vaultka's GLM, GMX V1's GLP and GMX V2's GM have a combined-separated-combined structural relationship as shown in the figure below:

GLP     ;       GLM

     ➷ GM➹

GLM supports users to recharge using USDC and GM. When the user recharges USDC into a large amount, it will be dynamically converted into LP for the BTC-USDC trading pair and ETH-USDC trading pair. Token GM.

In addition, Vaultka has also established an internal balancing mechanism and an external balancing mechanism to maintain a relatively stable and balanced proportion of LP assets in the vault.

Finally, let’s briefly introduce the Vaultka project. It is a DeFi protocol that focuses on providing Perps DEX LP enhancement strategies. It supports multiple Perps such as GMX, HMX, GNS, and APX. DEX’s LP returns are enhanced.

Currently the team has a strong relationship with GMX. They just received a 100,000 $ARB Grant from GMX to encourage them to provide more and better GMX LP. Yield enhancing products.

Vaultka's economic model is also copied from GMX. The native token VKA of the pledge agreement can obtain 60% of the agreement income and be issued in the form of USDC.

In February 2024, in the passive income market segment, the LRT project was a hot topic, but the Perps DEX LP income enhancement agreement was ignored. Is behind this phenomenon the effectiveness of the market or the mismatch of the market? Are there any hidden pitfalls in this, and are there any potential Alpha opportunities? All worth thinking about.