GMX

Derivatives

GMX is a decentralized leverage trading platform currently deployed on the Arbitrum and Avalanche networks. It offers users low swap fees and zero price impact trades through unique protocol mechanics and tokenomics.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
GMX offers a simple decentralized method for users to trade with leverage through a combination of strong tokenomics and an easy-to-use user interface.
What we like less
The team is anonymous and still has control over GMX core contracts, though a solid 4/6 multisig consisting of community members and advisors can take control if any malicious actions are detected.
What it means for you
GMX is one of the top platforms for you to place directionally levered bets and hedge against market volatility. You can earn a portion of the platform's trading-related fees by staking its native governance and liquidity provider tokens.
Information
Info
  • Website
  • Token: GMX
  • Tags: Derivatives
Key Metrics
  • TVL: $192.6M (Rank #49)
  • TVL Ranking by Derivatives: #3
  • Blockchain: Arbitrum, Avalanche
  • Chain TVL
    • Arbitrum: $151.71M
    • Avalanche: $40.84M
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by several experienced auditors including ABDK and Quantstamp
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 5% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of at least 4 signers, which means the protocol is less susceptible to centralization risks
  • Timelock is less than 48hrs, which provides users with less time to exit if any malicious upgrades are approved
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • Robust controls to mitigate oracle price manipulation
  • This protocol is susceptible to risks related to decentralized derivatives, such as LPs serving as the counterparty for all platform traders
Things to know about GMX

How GMX works

GMX operates as a mix of a perpetual and spot exchange for traders, as well as a crypto index fund for liquidity providers. Perp traders can long or short assets from the protocol's liquidity pool with up to 30x leverage. Spot traders can swap tokens from the same pool with nearly zero price impact as GMX uses Chainlink price oracles in combination with FTX and Binance market data to price assets. This is in contrast to the traditional automated market maker (AMM) formula so users don't incur slippage. To achieve all this, GMX created the GMX liquidity provider token (GLP) which holds a basket of assets including BTC, ETH, and USDC. As such, GLP holders are exposed to the price volatility of the underlying assets, adjusted by the positions of traders (LPs automatically take other side of each trade so profits when traders lose). LPs add liquidity to mint the GLP token by adding any one of the basket assets to a multi-asset pool.

How GMX makes money

GMX charges a 0.1% fee for opening and closing positions plus a dynamic borrowing fee based on utilization rates and the underlying asset you choose to profit in. Swap fees are also dynamic and based on whether a swap improves the weights of assets in the GLP pool towards or away from the target allocations. Minting and redeeming of GLP similarly incurs a dynamic fee based on whether the selected asset is currently over or under-weight.

How you make money on GMX

You can make money by placing directionally levered bets on the crypto market. If you have a more long-term view, you can earn a portion of all protocol generated revenues from staking either the native GMX token or the GLP token. The fee split is currently 70% paid to GLP stakers and the remaining 30% paid to GMX stakers.

GMX Pools
GMX Fee Sharing
3%
Yield
$310M
TVL
Risk
B
Protocol
GMX
Chain
Arbitrum
GMX Crypto Market Making
10.9%
Yield
$142M
TVL
Risk
C
Protocol
GMX
Chain
Arbitrum
GMX AVAX-Tricrypto Market Making
21.3%
Yield
$31M
TVL
Risk
C
Protocol
GMX
Chain
Avalanche