We briefly discuss below the advantages and disadvantages of the GMX protocol for three types of users: users of exchange assets, liquidity providers, and speculative traders. What are the advantages and disadvantages?
GMX tokenomics revolves around two key tokens that form the foundation of the GMX ecosystem. Understanding how these tokens work and interact with each other is essential for any derivatives trader or DeFi enthusiast interested in the GMX exchange.
Additionally, V2 has strengthened risk management tools, providing users with more protective measures to cope with market fluctuations. These updates indicate GMX’s ongoing efforts to boost the platform’s competitiveness and deliver better services to its users.
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.
Introducing funding fees determined by the open interest of long and short positions, facilitating balance between the two through arbitrage.
Order book models thrive on multitudinous buyers and sellers present in the market. However, there are tons of flaws in this model, especially for copyright. They are costly to run and also require market makers, who must be incentivized in some way.
Total staking value has topped $400 million and cumulative trading volume has surpassed $55 billion in the year since the GMX protocol was developed, making it the third-largest decentralized exchange on Arbitrum after Uniswap and Curve.
$GLP holders take the other side of the trades made out of the platform. Successful traders are paid out by the liquidity pool and on the flip side, unsuccessful traders payout to liquidity providers.
GMX launched its first version, V1, on Arbitrum in September 2021. V1 employed a unique here exchange model that allowed users to trade without the need to provide liquidity.
Among the new features, dYdX V4 introduces permissionless markets, allowing users to list and trade any asset instantly, provided there is an oracle price available.
By delving into GMX tokenomics, traders and DeFi enthusiasts can gain a better understanding of the dual-token ecosystem that powers this innovative derivatives trading platform.
The opinions expressed in this blog do not constitute investment advice and independent financial advice should be sought where appropriate.
This allows users to leverage up to 50x on their trades and tap into a multi-asset GLP pool worth more than $603 million.
The GMX protocol meets the needs of both liquidity providers and traders through GLP liquidity pools and GLP tokens. The GLP liquidity pool is a multi-asset liquidity pool consisting of many different cryptocurrencies.