What is GMX?
GMX is a perpetual contract trading platform for top cryptocurrencies that will be launched in September 2021.
Unlike decentralized spot exchanges, you can trade perpetuals on GMX. You do not buy or sell any tokens. You can instead deposit collateral and take both long and short positions. The profit is paid at settlement in USDC (for shorts) or the pair's other token (for longs).
On GMX, you can get up to 50x leverage.
GMX attracted degens due to its zero price impact trades, limit orders, and low swap fees. Especially those attempting to qualify for an Arbitrum airdrop.
Chainlink's oracles, which aggregate price feeds from leading exchanges, are used to calculate market prices. This protects positions from liquidation as a result of random ticks on a single automated market maker.
As a result, GMX is now the most popular dapp on Arbitrum by TVL and the most popular perpetual exchange in DeFi. As of December 2022, the total trading volume had surpassed $80 billion.
The founding team
Anonymous founded GMX.
The protocol began as a merger of XVIX and Gambit, converting their tokens to GMX. X is a public-facing developer.
While a completely anonymous team may pose a risk, it also protects the dapp from regulations and frivolous lawsuits.
As a result, GMX is now the most popular dapp on Arbitrum by TVL and the most popular perpetual exchange in DeFi. As of December 2022, the total trading volume had surpassed $80 billion.
How does GMX work?
GMX is not the first decentralized derivatives market, but it does have many features that other projects do not have.
The GLP pool is a community-operated 'unionized' liquidity pool at the heart of GMX. GLP is a liquidity index used for leveraged trading. When traders lose (due to leverage), GLP holders profit, and vice versa.
GMX traders enjoy zero price impact trades and pay two types of fees:
To open a trade, a 0.1% fee of the position size is charged. A "borrow fee" of (assets borrowed)/(total assets in the pool) * 0.01% per hour is charged.
This borrow fee is determined by the asset's utilization: it is lower for less popular assets and higher for more popular assets.
All platform fees are divided equally among GMX and GLP token holders:
30% to GMX shareholders, 70% to GLP holders (liquidity providers).