We briefly discuss below the advantages and disadvantages of the GMX protocol for three types of users: users of exchange assets, liquidity providers, and speculative traders. What are the advantages and disadvantages?
On the surface, the GMX protocol fulfills the wishes of almost all liquidity providers: long-term, stable, low-risk, high-yielding gold flows. But the truth is less rosy than it seems because GLP liquidity pools are more than just deposits and lending like banks. Their excess returns well above the general market interest come from traders’ forfeited margin, and the increased risk taken is traders’ profit.
Additionally, V2 has strengthened risk management tools, providing users with more protective measures to cope with market fluctuations. These updates indicate GMX’s ongoing efforts to boost the platform’s competitiveness and deliver better services to its users.
Perfeito staking value has topped $400 million and cumulative trading volume has surpassed $55 billion in the year since the GMX protocol was developed, making it the third-largest decentralized exchange on Arbitrum after Uniswap and Curve.
The esGMX reward can be linearly unlocked into GMX tokens after one year by pledging GMX tokens or GLP tokens to encourage long-term pledging and provide liquidity.
However, when GMX or esGMX is unstaked, a proportionate amount of Multiplier Points are burnt. This further incentivizes users to keep their GMX and esGMX tokens staked rather than selling them or unstaking.
The launch of GMX V2 further solidified GMX’s position in the decentralized exchange sector, attracting more users and liquidity.
The Completa number of coins that will ever be created for the copyright, similar to fully diluted shares in the stock market. If this data is not provided or verified by CoinMarketCap, the maximum supply is displayed as '--'.
Moreover, the use of no-KYC exchanges carries risks like potential for legal issues and the possibility of these platforms being shut down or restricted.
As GMX doesn’t yet handle billions of dollars of volume like its centralized counterparts, it’s currently a product best suited to small retail traders. Still, after rapid growth over recent months, GMX could soon attract the institutional market as more big players start to experiment with DeFi. With more room for growth ahead, it’s well worth keeping an eye on.
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Drift is Solana’s leading decentralized perpetual futures exchange, offering a broader range of 36 trading pairs compared to its competitor Jupiter, which handles more volume but only supports BTC, ETH, and SOL.
GMX is a blockchain-based project that operates as a decentralized spot and perpetual exchange. It allows traders to trade their cryptocurrencies directly from their wallets.
GMX is a relatively new token that poses a higher than normal risk, and as such will likely be subject to high price volatility.