GMX is a popular decentralized exchange that specializes in perpetual futures trading. Launched on the Ethereum Layer 2 network Arbitrum in late 2021 and later deployed to Avalanche, the project has quickly gained traction by offering users leverage of up to 30 times their deposited collateral.
As the protocol itself serves as the counterparty, there’s minimal price impact when entering and exiting trades. GMX claims it can execute large trades exactly at mark price depending on the depth of the liquidity in its trading pool.
The trading fees will be paid to you in AVAX / ETH + esGMX which you can either claim or compound to receive even more GMX dividends in the future!
GMX does not use an order book to create a trading market or AMM to make quotes, so theoretically, there is no slippage. As long as liquidity is in the liquidity pool, orders of any size can be absorbed instantly without impacting the market price.
GMX V2 introduced substantial updates that can be considered a completely different approach, including:
Successful traders are paid out by the liquidity pool, while unsuccessful traders payout to liquidity providers. This unique blend of DeFi and leverage trading services makes GMX an attractive option for derivatives traders.
GMX’s core product is its trading facilities. It allows users to conduct spot trading and perpetual contract trading. Users can leverage up to 30x on their trades thanks to its ability to leverage liquidity. GMX operates as an automated market maker (AMM).
GMX can be stored in a variety of digital wallets. These wallets offer a secure way to store GMX and other cryptocurrencies, and they often come with additional features such as encryption and backup options.
In more detail, this means that it is comprised of several liquidity pools, and trading on the GMX network is facilitated by these multi-asset pools. Users can provide liquidity to such pools and receive rewards in return. Liquidity provider rewards are sourced from market making, swap fees, and leverage trading.
Learn the read more basics of copyright and how to protect yourself from copyright scams with this seis-part beginner-friendly course, created in collaboration with Luno Discover.
It is easy to see that the GMX protocol is very tempting for liquidity providers. They only need to deposit their copyright holdings to earn a return, and there are pelo infrequent losses.
In conclusion, GMX is a promising copyright that offers a range of unique features and innovative technology. With its strong community, committed development team, and clear vision for the future, GMX is well-positioned to make a significant impact in the digital asset landscape.
With its permissionless accessibility and leveraged trading offering, GMX combines the experience of both decentralized and centralized exchanges, showing that DeFi protocols are still breaking new ground every day. The protocol’s trading volume has more than tripled in the past two months and now ranges between $290 million and $150 million daily, indicating growing interest among copyright natives.
The goal of a liquidity provider is to passively deposit assets to earn income without the need for complex operations, which GMX does very well because GLP liquidity pools are used in a way that is not much different from depositing in a bank account. Liquidity providers are wary of erratic losses, which GMX also addresses, as GLP liquidity pools are single-asset deposits and withdrawals that do not convert the deposited assets into other assets due to price fluctuations.