GMX

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Discover GMX's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is GMX?

GMX is a decentralized perpetual futures exchange (DEX) that operates on the Arbitrum and Avalanche blockchains. It allows users to trade spot and perpetual swaps with up to 50x leverage directly from their wallets. The platform features a dynamic multi-asset pool called GLP, which provides liquidity and earns fees for liquidity providers. GMX also has a native governance and utility token, which can be staked to earn rewards and participate in governance decisions.

How is GMX used?

GMX is a decentralized perpetual exchange that allows users to trade spot and perpetual contracts for top cryptocurrencies like Bitcoin, Ethereum, and Avalanche. The platform operates on the Arbitrum and Avalanche blockchains, offering up to 100x leverage directly from a self-custodial wallet. Users can interact with the exchange via wallets like MetaMask, Coinbase Wallet, and WalletConnect.

Key Features and Uses
  • Trading: GMX enables trading with up to 50x leverage, offering perpetual contracts for various cryptocurrencies. Users can take long and short positions, with profits paid in USDC or the pair's other token at settlement.
  • Governance: GMX tokens are used for governance, giving holders the right to vote on proposals. They also accrue 70% of the total fees generated by the platform.
  • Staking: Users can stake GMX tokens to earn swap fees and fees from leverage trading. Stakers receive 30% of platform fees and other rewards, incentivizing long-term token holding.
  • Liquidity Provision: GMX aggregates prices from leading exchanges, reducing liquidity risks. Users can provide liquidity and earn a passive income through staking or liquidity provision.
  • Security: ABDK Consulting has audited GMX contracts, reducing smart contract risks. The platform aims to offer zero price impacts and has a swapping interface that is easy to use.

Overall, GMX provides a decentralized trading platform with features that aim to reduce impermanent loss and liquidity risks, making it a viable alternative to centralized exchanges.

How do I store GMX?

To store GMX tokens securely, you can use a variety of options:

  1. Ledger Hardware Wallet: Ledger offers a range of hardware wallets, such as the Ledger Nano S Plus and Ledger Nano X, that can securely store your GMX tokens. These wallets store your private keys offline, making them resistant to malicious attacks and threats. You can manage your GMX tokens using the Ledger Live App, which allows you to check your real-time balance, track transaction histories, and more.

  2. Wigwam Crypto Wallet: Wigwam provides a secure and user-friendly way to store GMX tokens. You can buy GMX with a credit card, store it in your wallet, and even stake it to earn rewards. Wigwam ensures ultimate security, allowing you to manage your tokens without limitations.

  3. KuCoin Account: You can also store GMX tokens in your KuCoin account. KuCoin offers a secure and trusted platform to hold your GMX tokens. Additionally, you can use non-custodial wallets for added security.

These options provide a secure and convenient way to manage your GMX tokens.

How to buy GMX?

To buy GMX (GMX) tokens, follow these steps:

  1. Choose a Platform: Select a reputable cryptocurrency exchange that supports GMX, such as Kraken, KuCoin, or Finder.

  2. Create an Account: Register on the chosen exchange's website or app. Verify your email address and identity by providing photo identification.

  3. Deposit Funds: Deposit local currency from a bank account or credit card, or transfer cryptocurrency from another exchange or wallet. Be aware of any fees associated with these methods.

  1. Buy GMX: Use the deposited funds to purchase GMX. You can either place an 'instant buy' order for a fixed price or open a trade on the spot market to set your own price.

  2. Secure Your GMX: Consider transferring your GMX to a personal crypto wallet to protect against exchange risks such as hacks, scams, or platform bankruptcy.

For more detailed instructions and specific exchange procedures, refer to the guides provided by each exchange or platforms like CoinCarp.

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History of GMX

GMX, a decentralized spot and perpetual exchange, was launched in September 2021 on the Arbitrum One blockchain. It later expanded to the Avalanche network in January 2022. The platform is known for its low swap fees and zero-price impact trades, allowing users to leverage up to 30x on their trades.

The founding team of GMX is anonymous, but they have a track record of launching successful protocols, including XVIX and Gambit. The team is also working on a new AMM called X4.

GMX's liquidity model, called GLP (Global Liquidity Pool), is a community-operated pool that earns fees for liquidity providers. The GLP pool is backed by a mix of stablecoins and other cryptocurrencies, ensuring that liquidity providers are rewarded for their contributions.

GMX has seen significant growth, with a protocol revenue of around $2 million per month since the start of 2022. The platform has also become the top dapp on Arbitrum by total value locked (TVL) and the leading perpetual exchange in DeFi, with a total trading volume exceeding $80 billion as of December 2022.

The GMX token is used for governance and accrues 70% of the total fees, while the GLP token is used by liquidity providers and earns the remaining 30% of fees.

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How GMX works

GMX is a decentralized exchange (DEX) that offers spot and leveraged trading on the Arbitrum and Avalanche blockchains. It operates through a multi-asset pool called GLP, which is community-owned and facilitates trading by providing liquidity. Here's how it works:

Trading on GMX
  1. Connecting Wallets: Users connect their cryptocurrency wallets to the GMX platform, allowing them to trade assets directly on-chain without needing to deposit funds into the exchange.

  2. GLP Pool: The GLP pool is a multi-asset pool that includes various cryptocurrencies like USDC, BTC, ETH, and others. This pool is used to facilitate trading and provide liquidity.

  3. Liquidity Providers: Liquidity providers (LPs) contribute assets to the GLP pool, which are then used to support trading. In return, LPs earn 70% of the platform fees and rewards in the form of escrowed GMX (esGMX).

  1. Perpetual Contracts: GMX allows users to trade perpetual contracts, which are financial derivatives without expiry dates. These contracts expose traders to the underlying asset without requiring ownership.

  2. Fees and Rewards: The platform generates fees from trading activities, which are then distributed between LPs and GMX token holders. LPs earn 70% of the fees, while GMX token holders earn 30%. Additionally, GMX token holders can stake their tokens to earn rewards, including esGMX, variable APRs, and multiplier points.

  3. Chainlink Oracles: GMX uses Chainlink oracles to aggregate prices from high-volume exchanges, ensuring dynamic and accurate pricing for traders.

  1. Governance: GMX token holders have a say in the governance of the platform, allowing them to vote on proposals and shape the future of the exchange.
Key Features
  • Decentralized: GMX operates on blockchain networks, ensuring a decentralized and permissionless trading environment.
  • Leveraged Trading: GMX offers up to 50x leverage for traders, making it attractive for those seeking high-risk, high-reward trading opportunities.
  • Zero Price Impact Trades: GMX's design ensures that trades do not impact market prices, reducing the risk of liquidations due to random market fluctuations.
  • Low Swap Fees: GMX aims to provide low swap fees, making it a cost-effective option for traders.

Overall, GMX provides a decentralized and community-driven trading platform that offers a range of features and incentives to attract both traders and liquidity providers.

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GMX's strengths

GMX (GMX) has several strengths that contribute to its success in the decentralized derivatives market:

  1. Zero Slippage and Low Fees: GMX offers zero slippage on trades and low fees, making it an attractive option for traders. This is particularly beneficial due to its deployment on Ethereum Layer 2 (Arbitrum) and Avalanche, which provide cost-effective and efficient transactions.

  2. High Capital Efficiency: GMX's liquidity model allows for high capital efficiency compared to other DeFi alternatives, ensuring that traders can maximize their trading potential with minimal capital requirements.

  3. Strong Value Accrual: GMX's tokenomics model is designed to provide strong value accrual to token holders and liquidity providers, denominated in ETH. This incentivizes participation and rewards contributors to the platform.

  1. Non-Inflationary Tokenomics: Unlike many other DeFi protocols, GMX does not rely on inflationary token incentives, which can lead to token devaluation. Instead, it focuses on sustainable revenue sharing and liquidity provision.

  2. Deep Liquidity: GMX is known for its deep liquidity pools, which are essential for supporting high trading volumes and minimizing price impact. This liquidity is generated from market making, swap fees, leverage trading, and asset rebalancing, and is channeled back to liquidity providers.

  3. Fast Transactions and Low Latency: GMX's infrastructure is designed to support fast transactions and low latency, ensuring a seamless user experience and high trading efficiency.

These strengths position GMX as a leader in the decentralized derivatives market, offering a unique combination of efficiency, low costs, and strong value accrual to its users.

GMX's risks

GMX (GMX) faces several risks, primarily related to its decentralized perpetual exchange and liquidity provision mechanisms. Key risks include:

  1. Oracle Manipulation: The GLP pool, which provides liquidity for traders, is vulnerable to oracle manipulation. This could lead to significant losses if the majority of traders are profitable, draining the GLP pool.

  2. Liquidity Risks: The liquidity for certain assets, like AVAX, is relatively thinner, making it easier for users to manipulate the market and drain the GLP pool. This was demonstrated in an exploit on Avalanche, where around $500,000 was drained from the GLP pool.

  3. Price Manipulation: The lack of slippage in GMX's perpetual exchange can lead to price manipulation, especially if traders start winning more often. This could negatively impact the GLP pool and the overall stability of the platform.

  1. Limited Asset Selection: Currently, GMX only supports trading in a few assets like ETH, BTC, LINK, UNI, and AVAX. This limited selection makes it difficult for GMX to become a go-to leverage platform, capping its upside.

  2. Risk of Errors in Calculation: The composition of the GLP pool, which includes a basket of assets, leaves room for errors in calculation. This could lead to unexpected losses or instability in the system.

These risks highlight the challenges GMX faces in maintaining a stable and secure decentralized exchange for leverage trading.

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Did GMX raise funds?

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GMX’s team

  • Karsten Schramm: Founder of GMX, known for his vision and leadership in the DeFi space.
  • Benjamin Simon: Co-founder at Stealth Crypto, contributing to GMX's innovative trading solutions.
  • Vincent Fernando: Chief Marketing Officer, responsible for marketing strategies and community engagement.
  • X: Public-facing developer, involved in the development and maintenance of GMX.

Whalee AI

The fundamental analysis assistant for crypto value investors.

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