Summary

GMX is a permissionless, decentralized perpetual swap contract and spot trading platform. Traders can use the platform to easily trade cryptocurrencies on-chain simply by linking their wallets. The native token of the GMX platform is called "GMX" and can be used as the governance, utility and pricing token of the GMX protocol. Users can stake GMX tokens, earn part of the GMX protocol's handling fees, and receive other incentive benefits. GMX currently supports Arbitrum and Avalanche networks.

Introduction

Blockchain and its application in finance and cryptocurrency fields The application has promoted the development of decentralized finance (DeFi). DeFi has been recognized by the mainstream public since 2020, and it was hailed as the "DeFi Summer" that year. Today, GMX proves the viability of trading on perpetual and spot trading platforms in a decentralized manner. Users can experience functions similar to centralized exchanges, but complete transactions through personal cryptocurrency wallets.

What is GMX?

GMX is a decentralized spot and perpetual contract trading platform. Through this platform, users can trade popular cryptocurrencies such as BTC, ETH and more directly from their cryptocurrency wallets. GMX users can trade spot and perpetual contracts with up to 50x leverage, operating similarly to centralized trading platforms. However, the difference from using a centralized trading platform is that users use cryptocurrency wallets to host their assets.

GMX aims to enhance users’ trading experience through low transaction fees and transactions that are not affected by prices. Trading is conducted through the platform’s native multi-asset capital pool GLP for liquidity providers to earn fees. In addition, GMX uses Chainlink oracles for dynamic pricing to aggregate prices from other high-volume trading platforms.

GMX was first released on the Arbitrum One blockchain, and the network will be launched in September 2021. Arbitrum is an Ethereum Layer-2 aggregation solution designed to increase the speed and scalability of Ethereum smart contracts. Then in January 2022, GMX went on to be deployed on Avalanche, a high-speed blockchain that is also compatible with the Ethereum Virtual Machine.

How does GMX work?

Transactions on the GMX platform are facilitated by the multi-asset capital pool GLP. The currency pool consists of 50-55% stablecoins, 25% ETH, 20% BTC, and 5-10% other alternative currencies, such as Chainlink and Uniswap.

Users minting GMX Liquidity Provider Tokens (GLP) will increase liquidity. Users who mint GLP receive 70% of all fees generated in that specific blockchain in return. Unlike some liquidity pools, GLP is not subject to impermanent losses.

Everyone can become a supplier of this liquidity pool and receive fees in return. If a user wants to trade perpetual swap contracts or spot, they can trade using the assets provided by this fund pool. In addition, the GLP pool serves as the trader’s counterparty; GLP token holders provide liquidity for leveraged trading, so when traders lose money, the pool profits and vice versa.

GLP tokens can be minted with any index asset, and index assets can be redeemed by destroying GLP tokens. Unlike GMX tokens, GLP tokens are automatically pledged and cannot be transferred. Arbitrum and Avalanche have different GLP prices, incentives and index compositions.

What is GMX token?

GMX tokens are utility and governance tokens. Holders can use the currency to vote on proposals and help determine the future direction of the trading platform.

Token holders who pledge their GMX can also receive three other rewards prepared by the protocol for users. First, 30% of all handling fees generated by the protocol are released to GMX stakers. These fees are collected from market making fees, transaction fees and leveraged trading, and are paid in ETH or AVAX.

Second, stakers receive escrow GMX (esGMX) tokens. These esGMX tokens can also be staked or locked to earn rewards. If you choose to lock it, the currency can be exchanged back to GMX after 12 months. Therefore, esGMX is issued as a lock-in pledge, which can prevent inflation and prevent people from selling GMX immediately.

Finally, stakers can earn multiplier points to boost earnings and long-term holder rewards so that tokens are not lost inflation. The above-mentioned dual incentive mechanism can stimulate users to invest in GMX, further promoting the decentralized ownership of the platform.

The maximum supply of GMX tokens is 13.25 million, of which 8.2 million are in circulation. Currently, 83% of circulating tokens are pledged.

What is unique about GMX?

Trading system

Traders can open leveraged positions through the GMX platform's simple trading interface, which is similar to traditional trading platforms. Additionally, the self-hosted and trustless GMX platform allows everyone to trade cryptocurrencies directly from their own private wallets.

GMX’s dual trading platform model supports spot trading and leverage trading of perpetual swap contracts. Due to the high asset utilization rate of the GLP capital pool, users' recharges not only remain idle, but also generate additional income, thus improving capital efficiency.

GMX can open and close trading positions without being affected by price. This mechanism helps traders obtain a better opening price than other order book trading platforms, and also eliminates the worry of sliding spreads. GMX also uses aggregation of Chainlink oracles and other price feeds to smooth out price fluctuations and thereby protect positions from temporary liquidations.

Ecosystem

GMX emphasizes the community importance, and attempts to cultivate users' DeFi thinking and encourage participation in the community and tool building.

Tools built by the community include Telegram holding robots, gmx.house rankings, gmxstats.com pages, Dune Analytics information boards, and Calculator for traders, stakers and liquidity providers. GMX’s cooperation projects are still expanding and will make full use of GMX’s composable modules to build DeFi functions.

The community is also responsible for communication about the GMX ecosystem. For example, the community is responsible for publishing the weekly newsletter "Blueberry Pulse", focusing on the development of the GMX ecosystem. Blueberry Podcasts are published in audio format.

How to use GMX

Transaction

1. GMX’s trading interface is displayed next to the price chart. If you want to enable leveraged trading, click "Go Long" or "Short" and set your personal preferences. GMX also provides simple and low-fee spot trading. Click the "Exchange" tab to open the interface, and you can exchange various tokens in the GLP fund pool.

2. What is displayed first is the collateral token provided by the user, and what is displayed below is the asset the user wants to trade. The leverage slider shows the range of amounts a user can borrow from the GLP pool. Limit, Take Profit and Stop Loss orders are available here.

3. Open positions will be displayed under "Positions". Click "Edit" to deposit or withdraw collateral. The handling fee for opening a leveraged transaction is 0.1% of the position size. Traders also pay an hourly borrowing fee determined by utilization. For detailed instructions, please visit the platform’s trading help page.

Pledge

To stake GMX tokens to earn rewards, users need to first link their wallet and press the "Stake" button.

Confirm on-chain in wallet Once you trade, you can start earning 30% of all GMX protocol fees, as well as esGMX tokens and multiplier points incentives.

GMX users The growth of the three rewards will be clearly displayed under the "Total Reward" item on the interface. Click the "Reinvest" button to pledge the rewards and reinvest the proceeds.

How to buy GMX on Binance

Cryptocurrencies like Binance GMX can be purchased on the trading platform.

1. Log in to your Binance account and enter [Trading] -> [Spot].

2. Enter "GMX" in the search bar to view the available trading pairs. Here we take GMX/BUSD as an example.

3. Visit the [Spot] box and enter the quantity of GMX you want to purchase. Here we take market order as an example. Click [Buy GMX] to confirm the order, and the purchased GMX will be credited to the spot wallet.

What is the development prospect of GMX

GMX’s own decentralization Autonomous Organization (DAO) The GMX DAO lays out the roadmap through its internal governance process. GMX's vision is to become a DEX with more complete functions that facilitates users to conduct on-chain margin trading. The current roadmap includes:

Synthetic assets

Synthetic assets will become a new token class and will be listed on trading platforms. The value of a synthetic cryptocurrency asset is determined by an underlying asset such as a stock, commodity or digital currency. Assets in this category are essentially digital forms of derivatives.

Optimize user interface and user experience

GMX is committed to further improving the user interface (UI) and user experience (UX) of the protocol. For example, GMX plans to integrate TradingView charts into the platform.

X4: Protocol-controlled trading platform

GMX’s long-term vision is to become an advanced automated market maker (AMM) so that other DeFi projects can build on top of its liquidity pool and fully customize the functionality of the pool. These projects can then customize operations to buy and sell tokens and increase or decrease liquidity at will.

Network extension

In addition to Arbitrum and Avalanche, GMX also plans to launch a trading platform on a third blockchain network.

Summary

Cryptocurrency trading has gone through a long development process. GMX hopes to help all users with cryptocurrency wallets enjoy the open and transparent services of the decentralized trading platform. First, traders can use GMX’s perpetual swaps and spot trading platforms. Secondly, users who hold GMX tokens can enjoy various rights and interests and have a say in governance. It is understood that the GMX community has full authority to decide the future development direction of the platform; therefore, in addition to the existing services of the trading platform, the community will also add other services.