GM Swapping

The GLM token introduces a swap function, enabling users to seamlessly exchange GM tokens with different underlying assets, all without incurring any swapping fees if the action aligns the GLM pool ratio with the target ratio.

Previously, GM holders faced hurdles when wanting to adjust their exposure by swapping tokens, resorting to withdrawing and redepositing, which resulted in various fees. With the introduction of GM swapping, users can now efficiently adjust their token exposure, minimizing fees if the pool ratio moves toward the target ratio post-swap. This mutually beneficial feature ensures a cost-effective solution for users while helping GLM maintain a healthy pool ratio of underlying assets.

Mechanism:

Swaps are executed by directly exchanging user assets with the GLM pool. Zero fees are applied when the swap aligns the pool ratio with the target ratio, offering a win-win scenario. For instance, if the current pool ratio for WBTC GM is 45% and ETH GM is 35%, a swap of ETH to BTC that adjusts ETH GM's ratio to 38% and WBTC GM's ratio to 42% will incur zero swapping fees.

Conversely, a fee is applied when the swap deviates from the target ratio to uphold GLM's robust target pool ratio.

Scenario	Fee from Swapping In	Fee from Swapping out
Swapping from Under-weighted to Over-weighted pools	No Fee	No Fee
Swapping from Under-weighted to Under-weighted pools	No Fee	Fee Charged
Swapping from Over-weighted to Over-weighted pools	Fee Charged	No Fee
Swapping from Over-weighted to Under-weighted pools	Fee Charged	Fee Charged