GMX (GMX) is a spot and perpetual decentralized exchange (DEX) that operates on the Arbitrum and Avalanche blockchains.
The term spot exchange refers to the rate at which a person can trade one currency for another. Additionally, spot currency transactions usually settle within two business. Hence, GMX is supposed to exchange one cryptocurrency for another fast.
A perpetual exchange uses perpetual swaps or perpetual futures contract. Perpetual futures contracts and swaps never expire. Hence, a person who buys a perpetual swap or contract gets the right to sell the asset.
A Decentralized Spot and Perpetual Exchange
They claim GMX’s decentralized spot and perpetual exchange offers low swap fees and zero impact trades. GMX supports trading with a multi-asset pool. Liquidity providers earn fees from market makers, swap fees, and leverage trading through GMX’s pool.
Chainlink Oracles and an aggregate of prices from leading volume exchanges support GMX’s dynamic pricing. Chainlink is a protocol that gives smart contracts access to real-world data and off-chain computation. Hence, GMX can set prices with real-world data and off-chain computation.
GMX claims its perpetual exchange allows users to trade cryptocurrencies with up to 50 times the leverage. Leverage is the use of credit to increase your trading position over the cash balance. Hence, GMX claims it can offer $5,000 in leverage on a $100 cash balance.
GMX (GMX) reported a Total Trading Volume of $1001.003 billion and open interest of $241.449 billion in Open Interest on 8 February 2023. The GMX DEX had 220,378 total users on 8 February 2023.
They claim GMX reduces liquidation rights with high-quality price feeds. GMX reduces trading costs by allowing users to enter and exit positions with minimal spread and zero price impact.
GMX claims it allows users to get the optimal price without incurring additional costs. They claim GMX’s simple swaps interface allows users to swap any supported crypto asset.
The GMX and GLP Tokens
Interestingly, GMX uses two tokens to create its ecosystem. Those tokens are GMX (GMX) and GLP (GLP).
GMX is the platform’s utility and governance token. They claim GMX holders can accrue 30% of the fees the platform generates. The GMX Token was offering an 8.42% annual percentage rate (APR) on Arbitrum and an 8.28% APR on Avalanche on 9 February 2023.
Staked GMX offers three types of rewards. Those rewards include escrowed GMX, Multiplier Points, and Ethereum/Avalanche Rewards.
GLP is GMX’s liquidity provider token. They claim the GLP accrues 70% of the platform’s generated fees. GLP was a offering a 21.11% APR on Arbitrum and a 21.06% APR on Avalanche on 8 February 2023.
GLP is an index of assets they use for swaps and leverage trading. They claim users can mint GLP with any indexed asset and burn it to redeem any other indexed asset.
They base the price for GLP redemption on the total worth of assets in the index, including losses and profits from open positions. Users can bridge GLP tokens to Arbitrum and Avalanche.
What Value Does GMX Offer?
Mr. Market concludes GMX (GMX) offers some value. It was CoinMarketCap’s 12th most trending cryptocurrency on 3 February 2023.
CoinMarketCap gave GMX (GMX) a ranking of 79th, a $67.37 Coin Price, a $569.607 million Market Cap, a Fully Diluted Market Cap of $596.558 million, and a 24- Hour Volume of $44.826 million on 8 February 2023. GMX also had a $37.485 million Centralized Exchange (CEX) Volume, and a Decentralized Exchange (DEX) Volume of $7.356 million on 8 February 2023. They based those numbers on a 8.455 million GMX Circulating Supply and a 8.872 million GMX Total Supply.
In contrast, CoinGecko gave GMX an 83rd ranking, a $67.35 Coin Price, a $569.448 million Market Cap, a 24-Hour Trading Volume of $40.557 million, and a Fully Diluted Valuation of $892.423 million. They base those numbers on an 8.455 million GMX Circulating Supply, and a 13.25 million GMX Maximum supply.
I think GMX (GMX) is a dex token that offers some value because of its high trading volume. The GMX token offers value because it appears people use it. Speculators who want to add a DEX token to their portfolio need to examine GMX.