Many decentralized exchange aggregation protocols also favor the zero transaction spread of the GMX protocol. Yield YAK, a revenue aggregation protocol on the Avalanche blockchain network, has more than 35% of its trading volume done through the GLP liquidity pool.
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.
With support for low swap fees and zero price impact trades, GMX quickly gained traction among traders seeking an edge in the competitive copyright market.
However, this did not deter GMX’s growth in any real way thus far. Since the start of 2022, GMX averages a protocol revenue of USD $2M per month.
It is easy to see that the GMX protocol is very tempting for liquidity providers. They only need to deposit their copyright holdings to earn a return, and there are pelo infrequent losses.
A: Purchasing GMX tokens is simple if you follow this detailed guide. Ensure you have a compatible wallet and follow the steps below to get started with GMX tokens.
Security is a top priority for GMX. The copyright uses advanced encryption techniques to ensure that all transactions are secure and that user data is protected.
GMX is known for its model which aims to maximize efficiency of capital locked in the protocol to facilitate spot and perpetual trading.
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.io.
The GMX token also has a floor price fund. It’s used to ensure that the GLP pool has sufficient liquidity, provide a reliable stream of ETH rewards for staked GMX and buy and burn GMX tokens in order to maintain a minimum price of GMX against ETH.
Introducing funding fees determined by the open interest of long and short positions, facilitating balance between the two through arbitrage.
Users do not exchange assets and trade on GMX as they do on centralized exchanges, where many users submit limited buy and sell orders in the order book. Trading with GMX is done by depositing and withdrawing assets from a liquidity pool called GLP, which is the counterparty to all traders.
Users can go “long,” “short,” or simply swap tokens on the exchange. Traders go long on an asset when they expect its value to increase, and they short in expectation of being able to buy an asset back at a lower price.
The fast completion and zero price shock nature of GMX exchange assets make it ideal for high-volume OTC transactions. Still, the downside is that more info the GLP liquidity pool has a small selection of assets, which limits its potential for non-popular, long-tail assets.