Suggestions on how to handle GMX rewards transactions

[_J_D]

Describe the problem:
For transactions like Arbitrum Transaction Hash (Txhash) Details | Arbiscan where a GMX user collects + compounds (stakes) their rewards from being a GMX/GLP staker, GMX sends multiple tokens to the user’s wallet, which are immediately removed and staked (esGMX, sGMX, bnGMX, sbGMX, sbfGMX).

How would you suggest handling these types of transactions? Would this be a series of rewards, followed by staking to pools (where you have to submit the value of each each token as they are received)
Or something else?

I think the part I’m really struggling with is what happens when you eventually unstake. It looks like most of those tokens are returned to pools/burned (see Arbitrum Transaction Hash (Txhash) Details | Arbiscan as an example ), so you never really own them.

Which exchange/wallet is this regarding?
GMX Earn on Arbitrum - app . gmx . io/#/earn

How did you import data into this wallet?
Arbitrum blockchain wallet sync

What have you tried to fix this so far?

[Koen_Masschelein]

Hi,

Bankless posted a good technical explanation on the protocol in their latest news letter, hope it helps you out:

The protocol utilizes a unique model where users can provide liquidity to an index-like basket of assets known as GLP. GLP, which is composed primarily of ETH, wBTC, and stables, acts as the counterparty for traders on the DEX who borrow from the liquidity pool to open up a leverage position. This means that GLP takes on “profit and loss (pnl) risk” in that it accrues value when traders make an unprofitable trade and vice versa. GLP earns a 70% cut of trading fees which are paid out in ETH and has been among the highest sustained sources of yield in all of DeFi, routinely netting between 20 - 30% APR.
GMX offers traders 0% slippage. Tokenholders can stake their GMX to earn a 30% cut of protocol revenue paid in ETH, escrowed GMX (esGMX), as well as boosted rewards when providing liquidity to GLP.

[Koen_Masschelein]

See following link as well: ITSA DeFi insight — GMX on-chain perpetuals and GLP | by International Token Standardization Association | Medium.

[icarium_jag]

As almost all of these tokens are only technical gimmicks that GMX protocol uses, for taxation I have soft deleted all sGMX, bnGMX, sbGMX and sbfGMX transactions that are not relevant for my holdings or taxation.

Only the esGMX rewards (and sending to pool if re-staked) and ETH reward are important and worth having in your Koinly tax report.