With GMX daily transaction fees surpassing Uniswap for the first time in Nov, and with $GMX price increasing in value by 155% for the past year while most DeFi projects are down 90%, GMX is definitely attracting the most attention.
We have seen more than 10+ GMX fork launched or pre-launching on different L2s. Many questions were raised from our community, friends and advisors. For example: why does Uniwhale want to build yet another oracle-based DEX, given there are GMX, Gains Network and others?; is Uniwhale a pure fork?; and how does Uniwhale differentiate itself from the competition?
Today we will discuss all these questions. Your comments are welcome!
Why does Uniwhale want to build yet another oracle-based DEX, given there are GMX, Gains Network and others?
Of all DeFi markets, perpetual (leverage trading) presents the biggest growth potential. 2021 CeFi perpetual trading volume was $57 trn, while DeFi perp trading was less than $2 trn, i.e. 3% of total volume. Currently, DeFi spot trading is around 10% of CeFi. This implies a 7% of $57 trn growth on DeFi perp trading.
Why not dYdX type of orderbook? dYdX matches orders off-chain and settles on-chain, which introduces centralization. More importantly, market-making is feasible mostly only to professional institutions. Especially after the FTX bankruptcy, we are more than ever convinced that a fully on-chain solution will protect our users better.
Why yet another oracle-based DEX? Although GMX has been a success and has done very well, it has areas that can be improved, such as centralized oracle and LP market beta risk. We address those issues, as well as introducing our own innovations.
Is Uniwhale a pure fork?
The short answer is No. Then how does Uniwhale differentiate itself from the competition? In the table below, we compare and contrast Uniwhale against two leading oracle-based DEXes.
GMX uses margin trading to provide leverage, while gTrade and Uniwhale use PnL trading (futures) to provide leverage. Margin trading requires “borrow fee” (that is charged per hour by GMX), because long requires borrowing funding and short requires borrowing assets. That also explains why the trading pairs are limited. At gTrade and Uniwhale, no such “borrow fee” are required.
GMX’s margin trading design also means liquidity provision requires a basket of BTC, ETH, some stablecoins, LINK and UNI. As a result, while their liquidity token, GLP, earns a passive yield in both ETH and its project token, liquidity providers face potential mark-to-market gain or loss (i.e. beta risk). This led to some protocols building risk-neutral strategies on top of GMX. Additionally, to inject or remove liquidity, liquidity providers need to pay 30–80bps fees to cover the swap fees from one token to multi tokens or vice versa.
Uniwhale, on the other hand, uses PnL trading design and accepts only stablecoins as liquidity and margin. Liquidity providers, therefore, earn stablecoin real yield and project token yield without mark-to-market risk.
Lastly, many people questioned GMX’s centralized oracle design. Uniwhale is building a custom oracle aggregator based on multiple protocols (including Pyth) to determine trading prices. By aggregating and filtering prices across multiple oracle protocols, our oracle aggregator can provide a price that is even more reliable with multiple redundancies.
So is Uniwhale a GMX fork?
We are a big fan of GMX and learn a lot from the trail-blazing project. As we shared at our piece on the evolution of the DeFi trading, we build on the efforts of the DeFi community to deliver on:
- Zero Credit Risk: full ownership and control of your assets
- Deeper Liquidity: trades with higher leverage, but with lower slippage cost
- Safer Liquidity Provision: enables retails to participate in liquidity provision, earning from marketing making like a pro, but at the same time, lower impermanent loss
So enough said, are we a GMX fork? We will be launching our testnet on BNB Chain soon, so experience it yourself!
To get involved and to stay updated on all Uniwhale related matters:
- Visit us on uniwhale.co
- Find our codes on Github
- Follow Uniwhale on Twitter
- Subscribe to the Uniwhale Medium
- Join the Uniwhale community on Discord
