GMX
GMX (GMX) is a decentralized spot- and perpetual-trading cryptocurrency exchange. Users can take advantage of its low swap fees and zero-price-impact trades by using leverage trading and market making. Chainlink oracles are used by GMX to get real-time pricing information from a number of exchanges. The Gambit exchange, which is no longer in use, is now called GMX.
The exchange offers services on the Arbitrum Layer 2 and Avalanche (AVAX) blockchains. The protocol was initially released in September 2021 on the Arbitrum network and then in January 2022 on the Avalanche network.
The people who started GMX are completely unknown. However, it is known that the team has successfully launched two more protocols, XVIX and Gambit. Additionally, the team is diligently developing a new AMM named X4.
On every centralized exchange, liquidity is provided by a traditional order book model, which relies on market makers. The order book is a record of the quantities of an asset that are being bid on or offered at each price level. However, there are numerous faults in the order book concept, particularly for cryptocurrencies. They are expensive to operate and require market makers, who must be rewarded.
AMM enables the permissionless and automatic trading of digital assets through the use of liquidity pools rather than a conventional market of buyers and sellers. On AMM, users execute trades against a pool of tokens known as a liquidity pool. AMM users contribute crypto tokens to liquidity pools whose prices are established by a constant mathematical formula.
As long as there is sufficient liquidity in the pool, an AMM ensures that there is always a willing counterparty at any given price.GMX uses it in order to improve the default AMM setup.
GMX isn't the first decentralized platform for trading perpetual contracts, but it is different in many respects. It transforms the paradigm with more leverage and a decentralized, multipurpose liquidity pool.
At the heart of the GMX exchange's functionality is a community-owned and "unionized" liquidity pool called the GLP pool. The GLP pool provides support for the spot trading and perpetual contract trading capabilities. Similar to other decentralized exchanges' liquidity pool systems, the community contributes assets to the GLP pool.
The GLP pool is distinctive in two ways:
Users can add individual assets to the GLP pool. The pool is utilized by the Automated Market Maker (AMM) to provide liquidity for the decentralized spot exchange (swap).
The GLP pool is also used by the leverage trading algorithm to fulfill traders' requests for loans.
The GMX token is utilized on the exchange for governance and staking. Token holders can vote on different ideas concerning how the platform should function. There are three different types of incentives that can be earned by staking the token on the market:
Escrowed GMX
Multiplier points
Standard incentives in ETH (for Arbitrum) or AVAX (for Avalanche)
The platform's classic benefits include 30% of the exchange's earnings from swaps and leveraged trading.
Neither GMX tokens nor GLP, the platform's other cryptocurrency, are utilized to pay for transactions. These transactions are made using ETH and AVAX on Arbitrum and Avalanche, respectively.
| DATE | NEWS/EVENTS | IMPACT |
| 29/11/2022 | DEX token GMX rises after beating Uniswap in trading fees for the first time | +35% Increase
|
| 05/10/2022 | Decentralized Exchange Token GMX soars following Binance and FTX Listings | +24% Increase |
| 18/09/2022 | GMX falls on concerns of AVAX/USD price manipulation on Reference Exchanges | -20% Decrease |
| 07/05/2022 | TerraUSD and LUNA both collapsed, and as a result, a number of crypto platforms folded in the aftermath | -29% Decrease |
CONCLUSION
GMX uses a creative way to provide liquidity. It not only allows for reduced swap fees, but it also offers advanced features such as continuous transactions, zero-impact trading, and up to 30x leverage. All of these things contribute to the platform's and its token's optimistic outlook. The token's strong performance demonstrates the exchange's substantial market potential.
