GMX(GMX) Project Analysis-CoinW Institute

6 min readMay 30, 2022

1.Research Institute Review

From a combination of recent token price, TVL and trading volume data, the perpetual contract project GMX has gained better market performance than dydx and Perptual, thanks in part to its agreement to give 100% of revenue back to the community, multiple forms of pledge rewards (especially for long-term holders), and multi-chain deployment (newly launched Avalanche ecosystem). Although GMX has gained better market performance in the last 5 months, dydx still holds the top spot in terms of trading volume, TVL and market capitalization, and GMX still has a long way to go to challenge dydx’s leading position.

2. recent breakout point

DEFI+layer2

3.Project introduction

GMX is the largest decentralized spot and derivatives trading protocol in the Arbitrum ecosystem. renamed from Gambit on the original BNB Chain, GMX started to go live on Arbitrum in a public version in the third quarter of last year, and integrated the Avalanche network in January of this year, allowing up to 30x leverage.

Trading on GMX is supported by a multi-asset pool that earns liquidity provider fees from market making, exchange fees and leveraged trades, with prices backed by aggregated prices from the Chainlink prophecy machine and mainstream exchanges.

GMX supports margin with ETH, WETH, BTC, LINK, UNI, USDC, USDT, DAI, FRAX, MIM to short or long ETH, BTC, LINK and UNI on Arbitrum, AVAX, BTC, ETH contracts on Avalanche, and collateral types supported include AVAX, Of course, GMX also provides stop-loss, take-profit and other functions.

At present, the transaction fee for opening and closing a position in GMX is 0.1%, which is a little higher than the mainstream centralized exchange. In addition, there is a debit fee paid to the counterparty, which will be deducted at the beginning of each hour, and the deducted fee is constantly changing according to the utilization (utilization), calculated as: borrowed assets / total assets in the pool * 0.01%. For liquidation, if the value of collateral minus losses and loan fees is less than 1% of the position size, the position is automatically closed.

According to the official website, GMX has generated more than $38 million in fees on Arbitrum since last September, with over $28.8 billion in trading volume, and nearly $9 billion in trading volume in the four months or so since supporting the Avalanche network, with total fee revenue of more than $12 million.

4.Token Role

GMX pledgers receive 30% of the platform fees and esGMX and Multiplier Points, where 30% of the platform fees generated by exchange and leverage transactions are converted to ETH (on Arbitrum) or AVAX (on Avalanche) for distribution to pledgers. In addition, the liquidity provider token GLP on GMX can also be pledged, and GLP pledgers both receive esGMX rewards and 70% of the platform fees, which, like GMX pledgers, are converted into ETH (on Arbitrum) or AVAX (on Avalanche) rewards.

GMX tokens have floor funds in ETH and GLP. It grows in two ways.

(1) GMX/ETH liquidity is provided and owned by the protocol and the fees of the pair are converted to GLP and deposited into the reserve fund

50% of the funds received through Olympus Bonds are sent to the Floor Fund and the other 50% is used for marketing

The current Floor Fund can be viewed on the Dashboard.

(2) The Floor Fund helps ensure GLP liquidity and provides a reliable stream of ETH rewards for all pledged GMX.

As the Floor Fund grows, it can also be used to repurchase and destroy GMX if (the Floor Fund)/(the total supply of GMX) is below the market price, which will result in a minimum price of ETH and GLP for GMX.

(3) Stake GMX receives three types of rewards.

(1) Escrow GMX

(2) Multiplier Points

(3) ETH / AVAX rewards

5.Token Economic Model

GMX has launched the utility and governance token GMX with an estimated maximum supply of 13.25 million GMX tokens. Of these, 6 million are migrated from XVIX and Gambit, 2 million are used as Escrowed GMX (esGMX, released in 365 days after vest) rewards pledged by GMX, 2 million are managed by the Floor Price Fund, 1 million are used for marketing, partnerships and community developers, and 250,000 are allocated to The team has 250,000 tokens, which will be released linearly over two years.

GMX’s supply can be viewed on the Dashboard.

The increase in circulating supply will depend on the number of tokens acquired and the number of tokens used for marketing/partnerships. The maximum supply is expected to be 13.25 million GMX tokens.

The maximum supply of minted tokens over 13.25 million is controlled by a 28-day time lock. This option will only be used when additional products are launched and liquidity mining is required, and will be subject to a governance vote prior to any changes.

6 million GMX from XVIX and Gambit migration.

2 million GMX paired with ETH for Uniswap liquidity.

2 million GMX set aside for vesting of hosted GMX rewards.

2 million GMX tokens are managed by the reserve fund.

1 million GMX tokens reserved for marketing, partners and community developers.

250,000 GMX tokens are distributed linearly to the team over 2 years.

.Project Features

GMX is primarily a decentralized perpetual contract exchange that includes the following four features.

(1) Zero Slippage: Users can enjoy a zero slippage trading experience, traders can trade exactly at the marked price, without the risk of buying expensive.

(2) high leverage multiples: GMX users can open a maximum of 30 times the bar, much higher than the FTX 20 times the leverage.

(3) fair and transparent: GMX exchange data all in the chain, there is no malicious pin, resulting in user losses.

(4) no regulation: GMX exchange users do not need KYC, enjoy a higher level of privacy protection.

6. Project advantages

GMX is mainly a decentralized perpetual contract exchange that contains the following four features Zero slippage: Users can enjoy a zero-slip trading experience, traders can trade exactly according to the marked price, there is no risk of buying expensive. High leverage multiples: GMX users can open a maximum of 30 times the bar, much higher than the FTX 20 times the leverage. Fair and transparent: GMX exchange data are all on the chain, there is no malicious pinning, resulting in user losses. No regulation: GMX exchange users do not need KYC, enjoy a higher level of privacy protection.

7. Community

telegram:7916 people

twiter:37200 people

discord:4578people

8. Future Outlook

GMX has become a major player in the decentralized perpetual contracts exchange market. To date, GMX has traded over $16 billion in volume and generated over $22 million in fees. Compared to dydx and Perptual, GMX has a better market performance mainly due to: 1. GMX’s economic model. GMX gives back 100% of the transaction fees to the token pledgees, which enhances the economic value of the tokens. 2. online Avalanche. GMX was previously only deployed in Arbitrum, but has recently gone online Avalanche, boosting transaction volume and user numbers. Compare the market data of dydx, Perptual and GMX for the last 5 months, including token price, TVL and platform trading volume, and detail the basic information and economic model of GMX. Exchanges support more tokens: Compared to dydx, which supports 29 tokens, and FTX, which supports 227 tokens, GMX supports only 6 tokens. As the product list expands in the future, GMX’s user base should grow as well.

Expansion to other public chains: GMX now resides on Arbitrum and Avalanche. The former is the public chain with the largest lockup in Ether leyer 2, while the latter is the leyer 1 public chain with the best user experience. Compared with the cross-chain ecology of dapps such as Sushiswap, GMX can also travel to other public chains in the future to further increase its user base and profitability.

Improving the performance of GLP: There is room for arbitrage in AMM exchanges, which is a risk-free profit model. the GLP pool has a large amount of money and uses the Chainlink prophecy machine to understand the “real price” of tokens, so there is a high probability that the profitability of GLP will be improved through arbitrage in the future. The APR of user pledges will be further increased.

X4 launch: GMX’s developer nickname is X. In the past, the project X1/X2/X3 was developed, and the so-called X3 is now the GMX project. Now X4 is being prepared and is expected to create a new AMM mechanism with GMX.

Basic information

Project Description.

GMX is the largest decentralized spot and derivatives protocol in the Arbitrum ecosystem. renamed from Gambit on the original BNB Chain, GMX started its public version on Arbitrum in the third quarter of last year and was integrated into the Avalanche network in January this year, allowing up to 30x leverage.

Full token name: GMX

Token Name: GMX

Token Details.

Project website: https://gmx.io/

Project Documentation: https://gmxio.gitbook.io/gmx/

(1) Arbitrum.

Block query.

https://arbiscan.io/token/0xfc5a1a6eb076a2c7ad06ed22c90d7e710e35ad0a

Liquidity Query.

https://arbiscan.io/address/0xfc5a1a6eb076a2c7ad06ed22c90d7e710e35ad0a

(2) Avalanche.

Block queries.