GMX
GMX is a decentralized spot and perpetual exchange that supports low swap fees and zero price impact trades. Perpetual contract traders can use up to 30X leverage on the GMX exchange. Users benefit from a unique token incentive mechanism to compound their yield by staking tokens and participating in the protocol revenues.
Categories:
DAO
DeFi
Updated:
2023-03-10
Tags:
Perpetual
Ticker:
GMX
Token Strength.
Token Utility:
- $GMX (governance token): stake & earn 30% of protocol fees, $esGMX and Multiplier Points (MPs) to boost yield. Owning $GMX grants voting rights. - $esGMX (utility token): stake & earn to further compound $GMX staking yield. $esGMX can also be vested and get converted to $GMX after 1y. - $GLP (LP token): automatically staked, earn 70% of protocol fees and additional $esGMX.
Demand Driver:
- Token holders: are incentivized by governance rights and rewarded in $esGMX, MPs, and 30% of the protocol fees. - Liquidity providers: are encouraged to supply collateral (i.e., mint $GLP) to increase GLP pool size by receiving $esGMX and earn 70% of the protocol fees. The overall staking mechanism is a massive incentive for token holders to earn passive yield.
Value Creation:
- Spot and perpetual swap with up to 30X leverage. - Minimal liquidation risk due to Chainlink price feed accuracy. - Low cost with minimal spread and zero price impact. - Simple swap platform easy to use. - Increased capital efficiency due to high utilization of the GLP pool. - No KYC, non-custodial wallet service.
Value Capture:
- Governance rights are desirable by token holders. They get power over the community funds. - Revenues are allocated as real cash flow in $ETH/$AVAX, relieving $GMX emission. - $esGMX can be vested and commuted in $GMX after 1y. Doing so, staked $GMX/$GLP continues to accrue rewards and cannot be unstaked. This ensures value to token holders since it guarantees lower circulating supply.
Business Model:
- Swap fees: range from 0.2% - 0.8%. - Trading fees: 0.1% of the position size for each trading operation. - Execution fees: the keepers collect them in $ETH/$AVAX. - Liquidation fees: the value depends on the type of collateral involved. - Borrow fees: will vary based on GLP pool utilization. Since token holders receive all platform fees, more protocol revenues increase the token holders’ value.
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Protocol Analysis.
| Problems & Solutions | The vision of GMX is to become an even more complete and user-friendly DEX for on-chain leverage trading. The current roadmap includes many improvements, such as: - Better UI and UX to improve traders’ experience - Synthetic assets will be available on the platform - Network expansion alongside Arbitrum and Avalanche |
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| Predecessors | The first-mover in the field of perpetual DEXs was dYdX which only accepts $USDC as liquidity providing, and its tokenomics just provides for a single governance token. GMX overcomes these concepts by offering the chance to deposit different types of tokens as a liquidity supply, and its tokenomics revolves around multiple tokens with specific utilities. |
Investment Take
... coming soon
Tokenomics Timeline.
2021-09-13
TGE
Token Generation Event Deployment on Arbitrum One network
2022-01-02
Avalanche network deployment
Deployment on Avalanche network
2022-10-21
GMX Labs entity
Independent software development and marketing entity responsible for the development of the open-source code of the project, front-end and back-end.
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Allocation and Emission.
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Resources.
Author.
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