Although GMX V1 provided a relatively comprehensive on-chain derivatives solution and became the largest on-chain derivatives market by TVL, it had several user experience issues. These included high trading fees, potentially high borrowing costs for both long and short positions leading to high holding costs, significant skew in long and short positions causing losses for GLP holders, and the risk of a single asset causing losses for all GLP holders.
Traders also benefit from a GLP liquidity pool that allows them to quickly exchange large amounts of assets without price volatility, more accurately predicting losses and profits for each trade and managing their money accordingly.
$GLP holders have exposure to all of these assets, as well as trading fees and some rewards in the form of $esGMX tokens.
Additionally, 86% of the current circulating supply is staked on the platform showing investors’ trust in the project despite the bear market.
copyright futures are financial contracts that allow traders to speculate on the future price of cryptocurrencies, without owning the underlying assets.
One of the key features of GMX is its scalability. The GMX blockchain is designed to handle a high volume of transactions without compromising on speed or efficiency.
Both types of platforms cater to different risk appetites and trading strategies, offering unique advantages and challenges to copyright traders.
Users can deposit their copyright into the GLP pool to become liquidity providers and receive credentials for GLP tokens. Users staking GLP tokens can receive transition fees, funding fees, and liquidation fees, which fees will directly convert to the native assets of that blockchain network.
GMX aims to stand out by eliminating impermanent loss for liquidity providers and leveraging an AMM system that integrates leverage and futures trading directly into the liquidity pool, fostering a self-sustaining trading ecosystem.
One of the most significant differences between GMX and other decentralized exchanges is its ability to offer leverage trading services. By combining the experience of DeFi exchanges like Uniswap with the leverage trading services offered by centralized exchanges such as copyright, GMX creates a unique trading environment.
Some of the platform’s advantages over competitors include low swap fees and the ability to conduct trades with zero price impact.
Protocol revenue is split 70/30 between $GLP and the other protocol token $GMX. In addition to getting the larger share of protocol revenues, $GLP holders also get all the collateral when positions are liquidated which leads to a fluctuating but over-time growing inflow of revenue.
Because the GMX protocol improves the traditional liquidity pool model, users of the GMX exchange may benefit or be at risk depending on what decentralized financial services they use and what role they play in the GMX exchange.
Even as GMX takes the lead check here in the spot and perpetuals DEX space, the GMX team continues to build and develop new features for the platform.