GMX is a decentralized spot and perpetual contract trading platform that supports low swap fees and zero-price impact trades. Thus, users can leverage up to 30x on their trades. The protocol first went live on Arbitrum in September 2021 before launching on Avalanche at the beginning of 2022.
Trading in the platform happens through a unique multi-asset liquidity pool generating rewards from market making, swap fees, leverage trading, and asset rebalancing.
A Closer look at the Project
There has been an impressive strength from GMX. Since October 2021, most projects have seen a downward price trend. However, GMX is up 100%.
Additionally, in May 2022, GMX wrote that they have 1.8 million held in USDC and a burn rate of 100k per month for development. This will likely see them through to the first quarter of 2024. In addition, there will be a proposal on developing a way to send a small percentage of fees to the treasury in the coming updates. This, in turn, will extend their runway.
An explanation for this strength in such a time can be its robust utility, great tokenomics, and great community.
GMX is available on Arbitrum and Avalanche. However, GMX indicates that they will still deploy to more chains.
GMX Tokenomics
GMX’s circulating supply is 8 million tokens, and the forecasted maximum supply is 13.25 million.
The GMX ecosystem has two tokens, GMX and GLP. The annual percentage rate (APR) differs depending on the chain you stake, but at the automated teller machine, it is roughly 13% on GMX and 195 on GLP.
Therefore, the staking mechanism on GMX keeps GMX locked in staking and avoids inflation by design.
GMX and GLP are a masterwork of value accrual. As long as people are using the platform, they are paying fees and presumably taking losses which feed into the GLP pool and pay stakes.
$495 million of total value is locked in Arbitrum and Avax, closing in on half a billion in a bear market.
Final Thoughts
As GMX grows, we see more projects built around it popping up. The pump is supported by a large community in Telegram and Discord. A great community shows a great sign of a project’s health.
GMX stands as a testament to what a strong community and great tokenomics can create in crypto. GMX makes you the liquidity provider; you take the place of Binance or FTX and earn yield.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.
