What is GMX? What is GMX? A Perpetual project built on the Arbitrum ecosystem. Can GMX develop and surpass Perpetual or even dYdX? Join us to learn more about GMX in the article below.
To better understand GMX, people can refer to some of the articles below:
- What are Derivatives? Powerful profit tool for Crypto winter
- What is dYdX? dYdX Cryptocurrency Overview
- GMX 2.0: Changes to Overthrow dYdX
Overview of GMX
What is GMX?
GMX is a suite of products that includes decentralized Spot and Perpetual exchanges with low fees and no slippage. With GMX, users can Long – Short many different types of assets such as BTC, ETH, ARB, LINK, UNI,… with leverage up to 50x.
Initially, GMX was built on HST BNB Chain, but when it was successfully developed on Arbitrum, GMX stopped operating on BNB Chain. As of now GMX is active on Arbitrum & Avalanche C Chain. Some advantages of GMX include:
- Zero Slippage, Funding Fee.
- In terms of user friendliness, GMX is much better than competitors in the same segment.
- Provides all the tools traders require such as Stoploss, Trigger, Partial Liquidation,…
- Huge leverage up to 50x
- Building on Arbitrum & Avalanche makes trading fees on GMX relatively cheap.
Besides the advantages, GMX still has some disadvantages such as:
- The number of currently supported asset types is quite small, with only 4 pairs (ETH, BTC, LINK, UNI) to play Long – Short, and Swap is more diverse with up to 9 asset types compared to dYdX. up to 34 trading pairs & Perpetual has 17 trading pairs. GMX remains poorly diversified in its assets.
- Only ETH and USDC pools have more than $100M in liquidity and the remaining pools are at a fairly low level.
- Liquidity providers have many problems and risks that need to be carefully calculated before participating, so it is not for everyone.
- To complete a Long – Short order takes a lot of time, I have to sign at least 3 times before the order is successful and appears on the trading floor.
What is the GMX Difference?
GMX provides 2 main products including Spot & Perpetual.
- For Spot products, GMX builds different liquidity pools for each asset type, not AMM like Perpetual.
- For Perpetual products, it allows you to play Long – Short with many different types of assets such as ETH, BTC, LINK, UNI,…
For example: A user has USDC and wants to exchange it to BTC to play Long – Short on the GMX platform, the user will deposit his USDC into the USDC pool then BTC will be transferred from the BTC pool to the user’s wallet. Prices will be provided by Chainlink so there will definitely be no price slippage when users trade on the GMX platform. In version GMX V1, there were up to 9 types of assets supported for trading, but there has been a change in version V2, GMX aims to provide leverage for many different types of assets.
Overview of GMX V2
The V2 upgrade was born to solve the problems in its first version. In general, GMX will still retain the strongest things in version V1 such as the Tokenomics model or user interface, the rest will be a big revolution with the protocol itself. An upgrade full of promise as well as challenges for the development team. V1’s outstanding issues include:
- The number of supported assets is small.
- The development team and the project itself do not benefit from the project’s development.
- The transaction fee model on GMX V1 is not really competitive with many Perpetual platforms on the market.
Everyone can refer to the detailed article about GMX V2 in GMX 2.0: Changes to Overthrow dYdX.
Core Team
The project is built by an anonymous team.
Investor
Update…
Development roadmap
- August 31, 2021: GMX officially goes into operation on Arbitrum.
- September 14, 2021: GMX Update 1.
- November 3, 2022: GMX organizes the “GMX Tradding Competition” event with a total prize pool of $250K.
- November 26, 2021: GMX Update 2.
- January 6, 2022: GMX is available on Avalanche.
- May 20, 2022: GMX Update.
- July 1, 2022: GMX updated to improve user friendliness.
- May 2023: GMX launches Testnet version of GMX V2.
- August 2023: GMX launches the Beta Mainnet version of GMX V2.
It can be said that although it is not visible, the GMX development team is very diligent in building, following the proposed roadmap and has had positive results.
Tokenomics
Basic information about GMX token
- Token name: GMX
- Code: GMX
- Blockchain: Arbitrum
- Token classification: ERC – 20
- Contract: 0xfc5a1a6eb076a2c7ad06ed22c90d7e710e35ad0a
- Total supply: 8,108,481
Token Use Case
GMX is building a tokenomic mechanism that the market is evaluating as quite “ponzi”.
The project’s revenue will be shared between 2 subjects: GMX Holder (GMX token holder) & GLP Holder (liquidity provider for the protocol) in which 30% of revenue will go to GMX Holder & 70% Revenue will go to GLP Holder. The project’s revenue comes from spreads, swap fees & lending fees. G
MX Holder on Ethereum will receive revenue in ETH.
GMX Holder on Avalanche will receive revenue as AVAX.
=> From there, it helps reduce the selling force of GMX on exchanges. When staking GMX you will not receive GMX but the reward will be esGMX. 1 esGMX has the same value as 1 GMX but it takes 1 year to completely unlock it into GMX. If you don’t vest, you can continue to hold esGX and continue staking to receive GMX. With esGMX, GMX encourages their users to stake GMX tokens for a long time.
When GMX Holder you will also receive Multiplier Points. When you stake GMX long term, you will receive a fixed 100% APY. For example:
- In year 1, you stake 1,000 GMX, then after 1 year you receive 1,000 GMX + 1,000 MP.
- In year 2, you bring 1,000 GMX + 1,000 MP to continue staking. At this time, the reward for staking 1,000 MP & 1,000 GMX is the same. This means that even though you only stake 1,000 GMX at this time, you will receive the same reward as someone who staked 2,000 GMX.
- In year 3, you have 1,000 GMX + 4,000 MP reward at this time similar to if you were in year 4,000 GMX.
Then just like that, the multiplier increases by 2 because MP’s APY is 100%, this is called ponzi calculation in GMX’s tokenomic design. Holder does not want to sell his tokens and just wants to stake.
SUMMARY OF TOKENOMIC
- GMX: earn ETH/AVAX, esGMX and MP.
- esGMX: earn ETH/AVAX, esGMX and MP.
- Multiplier Points: earn ETH/AVAX and higher APR for ETH/AVAX GLP: earn ETH/AVAX, esGMX.
- GLP: earn ETH/AVAX, esGMX and automatically stake rewards.
To put it simply, the project wants you to stake GMX for as long as possible. Their reward is REVENUE (ETH/AVAX). Whether you have more esGMX or Mp is essentially a reward that the project creates for you. The piece of cake (revenue) is still the same, it’s just who eats more or less.
Exchanges
Currently you can buy GMX on DEX exchanges such as Uniswap, Sushiswap on the Arbitrum ecosystem, besides GMX is listed on some major exchanges such as Binance, FTX,…
GMX Information Channel
- Website: https://gmx.io
- Twitter: https://twitter.com/GMX_IO
- Discord: https://discord.gg/6gGMfskFzm
summary
Derivative is expected to be a piece of the puzzle that will soon explode on Arbitrum’s ecosystem. In addition to the product having commendable improvements, GMX also has a truly different tokenomic model. Let’s wait for GMX’s performance in the near future!
