GFUND is a reimagining or an evolution of staking. Normally when you think about staking, it is most of the time about either A) staking two tokens (with the risk of impermanent loss) or B) you would invest token A into a staking pool and earn a percentage bonus in the form of token B.
Those traditional form of staking, while working fine, have some major downside: first they rely most of the time on minting rewards only (meaning once initial period ends, no more rewards), and there’s a risk of impermanent loss (ending up with way less of a token vs the other).
Now, with the new GFUND you are only dealing with 1 token, $GM, our governance token. It is effectively the same as a single token staking, except here you’re buying into a fund instead of staking per se, and there are now multi-avenues to assist in keeping its value inherently up.
All users of GFUND get to share the following:
- 20%* of our minting rewards are slowly added over time to GFUND: this amounts to 1 million GM over 3 months.
- 20%* of our trading fees are added to GFUND on each sale on GhostMarket.
- 5%* exit fees from people leaving GFUND are added to the fund.
Note: if the trading fee is paid in GM, it is instantly added, if it is in another asset, it will wait until there is 100 GM worth and then convert and add to the fund automatically through a swap on Flamingo.
It is essentially an index fund, the price of GFUND
will always be higher than the price of GM token (ratio will start at 1:1), as the pool value increases overtime with trading fees, minting rewards and exit fees. Meaning that you are guaranteed to come out with more GM than you started with (minus the exit fee).
The GFUND yield is not claimable but added to the fund. The fund shares value amongst investors. This means you get your yield in the form of increased GM Tokens when exiting.*All numbers subject to change based on how the product performs.