GMX is a popular decentralized exchange that specializes in perpetual futures trading. Launched on the Ethereum Layer 2 network Arbitrum in late 2021 and later deployed to Avalanche, the project has quickly gained traction by offering users leverage of up to 30 times their deposited collateral.
Introducing price impact, giving trades that promote balance better pricing and imposing negative price impact on trades that increase imbalance.
The decentralized exchange ecosystem is based on two tokens: GLP and GMX. The first token serves to supply liquidity.
However, this did not deter GMX’s growth in any real way thus far. Since the start of 2022, GMX averages a protocol revenue of USD $2M per month.
Since GLP stakers bear the risk of trades on the platform, 70% of platform fees are distributed to liquidity providers and the remaining 30% is given to GMX stakers.
This appchain ensures that the dYdX protocol uses a decentralized order book and matching engine that enhances the platform's scalability and security.
GMX is a decentralized exchange that supports spot and perpetual contract trading. It encourages users to deposit copyright assets into a liquidity pool to become market makers and earn transaction fees.
Unlike most DEXs which use multiple single-asset pools, GMX utilizes a single multi-asset pool to facilitate all of their trades. This multi-asset pool is known as GLP and consists of several large cap tokens and stablecoins.
Among other things, it allows market participants to profit from price downturns, reduce risk in uncertain conditions, and bet big on an asset when they have conviction.
The founder details of GMX are not prominently disclosed, aligning with the decentralized ethos of the platform which focuses more on collective governance and community-driven development.
It is easy to see that the GMX protocol is very tempting for liquidity providers. They only need to deposit their copyright holdings to earn a return, and there are no infrequent losses.
Protocol revenue is split 70/30 between $GLP and the other protocol token $GMX. In addition to getting the larger share of protocol revenues, $GLP holders also get all the collateral when positions are liquidated which leads to read more a fluctuating but over-time growing inflow of revenue.
For traders in regions with strict regulations like the USA, UK and China, finding copyright futures exchanges that don’t require identity verification is crucial.
As long as there is liquidity in the pool, the exchange will complete the transaction without the risk of not finding a counterparty to match and being unable to trade.