May 31
Decentralized perpetual trading
This crypto project will be huge: Decentralized perpetual exchange on Avalanche
Trade BTC, ETH, AVAX and other tokens with up to 30x leverage
Hey crypto community!
Today, I’m going to talk about one of the best decentralized exchange platforms I have experienced so far: GMX on Avalanche.
In this article, I’ll briefly explain what GMX is, how it works, what tokens it offers and why you should try it. I hope you enjoy the read!
About GMX: Decentralized perpetual exchange
GMX is a decentralized exchange that supports low swap fees and zero price impact trades. You can access it through the link below:
Trading is supported by a unique multi-asset pool that earns liquidity providers fees from market making, swap fees, and leverage trading. Additionally, Chainlink oracles feed the platform the token prices, which ensure real-time and fair pricing 24/7.
What’s special about GMX is that, besides spot trading (buying crypto “on the spot,” hence the name), you can also perform perpetual trading.
This type of trading allows you to leverage your position, increasing potential profits. Be careful, however, as it also increases risks.
Perpetual contracts: A brief explanation
A perpetual contract is similar to a futures contract, which allows a person to buy or sell an asset at a predetermined date for a specified price.
The difference between the two is that perpetual contracts have no expiration or settlement date, allowing you to buy or sell based on your expectations of the future price of an asset.
In other words, perpetual contracts enable you to hold leveraged positions for an indefinite amount of time. These positions — long or short — earn profits as the price of an asset moves:
- Long position: Earns a profit if the token’s price goes up, but suffers a loss if the token’s price goes down.
- Short position: Earns a profit if the token’s price goes down, but suffers a loss if the token’s price goes up.
Typically, these type of trades are performed on centralized exchanges, requiring you to pass a KYC verification and creating and account.
However, with GMX, you can access these trades on a decentralized manner through your web3 wallet.
GMX tokens: $GMX and $GLP
The platform has two native tokens that serve different purposes.
GMX
The GMX token is the utility and governance token within the app. In other words, owning $GMX is like owning a piece of the platform.
That said, you can stake $GMX to have a say and cast votes on the app’s governance and voting system. Not to mention that 30% of fees generated from swaps and leverage trading are converted to AVAX and distributed GMX token stakers.
GLP
GLP consists of an index of assets used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset. This is GMX’s way of providing liquidity for leveraged trades.
Essentially, it is a universal liquidity provider token that accrues 70% of the platform’s generated fees.
The picture below illustrates the complete composition of underlying assets currently used to mint GLP.
Why you should try GMX
GMX offers a smooth experience. Perpetual trading can be cumbersome for beginners taking their first steps. GMX reduces the friction from it with a light, straightforward user interface.
In terms of concrete benefits, being decentralized comes with several advantages for users such as:
These advantages have led GMX to explosive growth in terms of usage, revenue, and volume. Don’t take my word for it. Take a look at the platform stats and see for yourself:
This popularity has been reflected on the GMX token, which has seen sustainable and consistent growth even during these adverse market conditions.
Start making money on GMX
If you’re a cryptocurrency or perpetual contracts trader, or were looking to become one, I’d recommend GMX to for your long and short positions.
As I’ve mentioned, there’s no KYC verification, personal information, or account creation required.
Just head down to GMX, connect your wallet, and start trading!
If you want to give me a hand and help me with my writing, as well as enjoying a nice discount on fees, you can enter the referral code “Trade” within the platform.
Finally, please be aware that cryptocurrency and perpetual trading involve significant risks that could lead to loss of funds. Make sure you understand the risks and invest only reasonable amounts that you can afford to lose.
I hope this article was helpful and that you enjoyed the read!
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I’m glad you did! My name is Santi. I enjoy and write about video games, cryptocurrency, and pop culture. If you’d like to read more content like this, follow me on Medium and Twitter. I’d really appreciate it!
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- My multi-chain address (Ethereum, Avalanche, Polygon, BNB Chain): 0x9a9AB154AeEA167AfDF5aE1A88955EAc9AdF5807
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