GMX: THE FUTURE OF CRYPTO DERIVATIVES TRADING

Uniera
5 min readJul 21, 2023

he cryptocurrency market has witnessed tremendous growth, leading to a demand for reliable and innovative solutions that can enhance investors’ profitability and overall trading experience. GMX has emerged as one of the leading platforms in the field of crypto derivatives trading, offering a variety of features and opportunities for traders and investors.

WHAT IS GMX PLATFORM?

Is a decentralized platform for spot and perpetual contract trading. It allows users to leverage their trades up to 50 times, providing substantial profit-generating opportunities. The platform was initially launched on Arbitrum in September 2021 and later expanded to Avalanche in early 2022.

A key aspect of GMX is its multi-asset liquidity pool, enabling users to earn rewards through various activities such as liquidity provision, trade fees, and leveraged trading. These rewards are then directed back to liquidity providers, creating a sustainable and collaborative ecosystem.

The platform offers spot trading for various prominent cryptocurrencies and stablecoins, including ETH, WBTC, LINK, UNI, DAI, USDC, USDT, and FRAX. Additionally, GMX provides perpetual trading, allowing traders to go long or short on tokens with leverage of up to 50 times. Unlike traditional order book-based trading, GMX utilizes a shared liquidity mechanism called GLP (Global Liquidity Pool), ensuring an efficient and uninterrupted trading experience.

DIFFERENCE BETWEEN GMX AND GLP

GMX has two distinct functional tokens: GMX and GLP. The GMX token serves as a governance token, enabling holders to participate in decision-making processes and earn rewards. On the other hand, the GLP token is the liquidity provider token, allowing users to contribute to the liquidity pool and earn rewards based on their stake.

The total value locked (TVL) on the platform in Arbitrum surpasses $600 million, making it one of the largest decentralized applications (dApps). This impressive TVL underscores the trust users have in GMX.

GMX offers a wide range of products to cater to different trading needs. Trades can be executed at the market price, and limit orders are available for more specific trading strategies. Trading fees range from 0.2% to 0.8% based on the GLP asset composition. Perpetual trading functionality allows traders to go long or short on preferred pairs, with leverage ranging from 1.1x to 50x. Various order types, including market, limit, take-profit, and stop-loss orders, are available to meet diverse trader needs. GMX charges a 0.1% fee for position opening and closing, and an hourly borrowing fee is calculated based on the borrowed assets and the total assets in the pool.

HOW IS THE COUNTERPARTY HANDLED?

The GLP token, as the liquidity provider, plays a crucial role in the GMX ecosystem. It consists of an asset index with target component weights that change based on the perpetual net position. GLP holders act as the sole counterparty for all perpetual traders and assume profit and loss concerning the traders’ net position. Participants staking GLP receive 70% of platform fees as rewards, paid in GMX with vesting and the respective blockchain’s native tokens (ETH for Arbitrum and AVAX for Avalanche).

HOLDERS OF GMX RECEIVE A PORTION OF PLATFORM FEES

Holders of GMX can stake their tokens to receive 30% of the platform fees in various forms, including GMX with vesting, multiplier points, and native tokens of the respective blockchain (ETH for Arbitrum and AVAX for Avalanche). GMX with vesting can be gradually released to become tradable GMX tokens, providing additional flexibility to the holders.

The GMX token offers a unique value proposition to its holders as they can benefit from the fees collected across the platform. It is available on both Arbitrum and Avalanche, and bridging between the two can be done using the Synapse Protocol.

GMX stands out among its competitors due to revenue-sharing for both GMX and GLP holders, in addition to its non-inflationary tokenomics model. By combining decentralized finance (DeFi) principles with leveraged trading services, GMX offers a unique experience for traders and investors.

Trading on GMX operates through a multi-asset liquidity pool, ensuring deep liquidity and seamless execution. The platform utilizes the Chainlink oracle to obtain accurate price updates, reducing the risk of liquidation due to temporary price fluctuations.

UPCOMING UPDATE FOR 2023

The platform will soon undergo an update that changes the way liquidity is provided to traders. This change is expected to be excellent as it will offer liquidity for more assets and expand its trading options, attracting more traders to the platform. The promise is that this update will be implemented in the second half of 2023. The revenue-sharing model with holders has become a reference for various projects in the crypto universe. To make this happen, it is necessary to maintain anonymity for team members to avoid issues with regulators worldwide.

About Uniera

Uniera has investing in game changing business models in the blockchain sector Uniera is dedicated to supporting early stage (pre-seed, seed and private) projects across the Web 3.0 space, including DeFi, Metaverse/GameFi, DAOs, and infrastructure layers. Through our investment vehicle in Cayman Islands, we manage proprietary and qualified investor`s funds into some of the most promising opportunities in crypto market.

Founded in March 2021, Uniera is a crypto exchange and manager dedicated to the portfolio of professional investors and family offices. Conceived by partners Caio Villa and Gustavo Albanesi, the company seeks to become the the main access route for investors to the best projects in the digital assets market. With tokens audited by Grant Thornton, one of the largest and most respected in the segment, Uniera seeks to raise the level of reliability in cryptocurrency trading in the country.

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Uniera

Uniera operates as crypto exchange and venture capital firm that supports early-stage projects. www.uniera.io