GMX — A Brief Introduction
GMX generated nearly $1 million in fees on September 5, 2022.
This placed it 3rd for the day and in the top 5 for the week.
You’ve heard of it, probably bought some, maybe used it.
Here’s another introductory look at what the protocol offers.
What is GMX?
A decentralized on-chain perpetual contracts exchange with revenue generation for stakers and LPs. The platform promotes 0 price impact trading low slippage.
It functions on Arbitrum and Avalanche with an active bridge through Synapse.
Why does it Matter?
GMX holds the highest TVL on Arbitrum, which is especially impressive considering it is of the same class as dYdX and Synthetix, with some differences in mechanics.
It uses Chainlink and aggregated exchange prices for the feed.
You can stake GMX and receive a derivative on Arbitrum or Avalanche, with a bridge between. 30% of trading fees go to these stakers.
A significant point that separates GMX from the competition is the staking rewards are paid in ETH or AVAX, depending on where you’re staked.
You can also earn in other ways, escrowed GMX and multiplier points rewards. These rewards can be compounded or claimed.
Escrowed GMX (esGMX)
Similar to GMX staking, stake them to earn rewards. They can be vested for a year to become GMX.
Multiplier Points
Multiplier Points Earned by staking GMX and meant to reward long-term holders without inflation. They can be staked for rewards similar to GMX staking. Some % are burned when un-staking GMX and esGMX.
Floor Price Fund
This is a protocol-owned fund to help ensure liquidity exists for GLP and ETH rewards for GMX stakers. It can also be used to buy back and burn GMX when needed.
The fund is accumulated through fees from the GMX/ETH pool (which creates GLP tokens) and from Olympus bonds.
Token
30% of fees go to stakers of $GMX and 70% to $GLP holders (GMX/ETH liquidity providers). Max supply of GMX is 13.25 million tokens, with the potential for minting more as the need arises and governance affirms.
The project is already doing quite well and is relatively popular. Thanks, at least to popular people in the space who have been showing interest for some time, including Arthur Hayes.
Referrals
A common trend in the space now is Crypto projects offering referral fees. The referral code is stored in a smart contract the first time the user makes a trade. Affiliates earn rebates from user trading fees up to 10% in trading discounts and 15% in rebates.
Conclusion
DEX perpetuals is not a new concept. However, GMX does offer some unique characteristics. During this downtrend, people want something to get excited about.
A relatively complex technical offering like a perpetuals DEX with new ways of rewarding would win some favor in the short term at least. With so many somewhat similar projects, what’s the long-term potential? GMX does have plans to add more features. Time will tell.
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