GMX is a decentralized spot and perpetual contract trading platform that enables low swap fees and zero price impact trades. Users can leverage up to 30x on their trades on this platform. GMX was first launched on the Arbitrum in September 2021, and later on the Avalanche blockchain at the beginning of 2022. The trading on GMX is supported by a multi-asset liquidity pool that generates rewards from market making, swap fees, leverage trading (spreads, funding fees & liquidations), and asset rebalancing, which are channelled back to liquidity providers.
GMX offers a unique feature called a shared liquidity mechanism called GLP (Global Liquidity Pool), which functions as a pool of all tradable assets. The perpetual swap markets allow traders to long or short major tokens with up to 30x leverage. Trades are made through the current oracle price (secured by Chainlink) with a theoretically indefinite depth.
The GMX system is divided into two distinct functional tokens: the GMX Token for governance and the GLP Token for trading liquidity. The project’s $260M+ total value locked (TVL) on Arbitrum makes it the largest dApp on the largest L2 as it stands today. Trading is supported through Swaps and Perpetual Trading, and Governance Staking is available through GMX token.
GMX is a popular decentralized exchange that specializes in perpetual futures trading. It provides non-custodial perpetual swap trading with an emphasis on friendly UX. On GMX, traders can make longs and shorts with rapid transactions and low swap and transaction fees, while liquidity providers can earn by providing assets to the protocol’s multi-asset pool system to support leverage trading and swaps.
GMX differs from other services in that it’s a decentralized exchange that offers leverage trading services, combining a similar experience to other DeFi exchanges like Uniswap with the leverage trading services offered by the likes of Binance. Users can take up to 30x leverage on BTC, ETH, AVAX, UNI, and LINK trades. Trading on GMX is supported by Chainlink Oracles, which use an aggregate price feed from leading volume exchanges to reduce liquidation risk from temporary wicks. Trading fees to open or close a position come in at 0.1%, and a variable borrow fee is also deducted from the deposit every hour. Swap fees are 0.33%.
The GMX token is the protocol’s utility and governance token, which allows stakers to receive 30% of the fees collected from across the platform. The GLP Token is the protocol’s native liquidity provider token and is essentially an index of the large-cap assets supported by the GMX protocol. GLP stakers receive 70% of GMX’s accrued fees.
Overall, GMX is positioning itself to be a leader in this derivatives product offering space because of its strong value proposition to token GMX holders and liquidity providers, denominated in ETH, and its non-inflationary tokenomics model.