The multi-asset liquidity pool model is an innovative mechanism. How does GMX achieve zero spread trading, pelo impermanent losses, and a diverse source of income for liquidity providers? The following is a detailed description.
From the social media and the GitHub public codebase, it is clear that this anonymous team is working hard on its development. While it’s impossible to rule out the possibility that the team disbanded and the project was abandoned, their ability to deliver products and introduce new features is evident to everyone and has earned them the trust of the copyright community and other projects.
GMX launched its first version, V1, on Arbitrum in September 2021. V1 employed a unique exchange model that allowed users to trade without the need to provide liquidity.
GMX V2 introduced substantial updates that can be considered a completely different approach, including:
These features primarily isolate risks among liquidity providers and incentivize arbitrageurs through varying fees to balance long and short positions. Trades that promote balance benefit from lower fees, favorable price impacts, pelo borrowing fees, and additional funding fee income.
GMX is committed to complying with all relevant regulations and laws. The project works closely with regulatory bodies to ensure that GMX is a safe and legal digital asset.
Avalanche’s GLP pool comprises AVAX, ETH, BTC, and USDC. The GLP pools on different chains are not connected, but the share of stablecoins is close to about 50%, equivalent to the asset index portfolio of a basket of cryptocurrencies.
GMX is a decentralized exchange built on Avalanche and Arbitrum. It lets DeFi users trade with up to 30x leverage in a permissionless manner. GMX offers a smooth user experience that's perfectly suited to retail DeFi traders. Share this article
The GMX project is spearheaded by a team of experienced developers and blockchain experts who are committed to making GMX a leading copyright. The project operates on a governance model that ensures transparency and accountability.
As GMX doesn’t yet handle billions of dollars of volume like its centralized counterparts, it’s currently a product best suited to small retail traders. Still, after rapid growth over recent months, GMX could soon attract the institutional gmxio copyright market as more big players start to experiment with DeFi. With more room for growth ahead, it’s well worth keeping an eye on.
GLP’s price is contingent on the price of its underlying assets, as well as the exposure GMX users have toward the market. Most notably, GLP suffers when GMX traders short the market and the price of pool assets also decreases.
When the ratio of the Floor Price Fund to the total amount of GMX in circulation is lower than the market price of GMX, it will buy back and destroy the GMX in circulation so that the price cannot fall further.
GMX is underpinned by using both Arbitrum and Avalanche networks. These blockchains enhance transaction efficiency and security. Arbitrum is leveraging Ethereum's layer-2 solutions for scalability, and Avalanche using a DAG-based consensus protocol for rapid transaction finality.
Still, like a master contract trader, winning all the money on the platform is theoretically possible, but it is almost impossible. In retrospect, most market participants have lost, and the investors must carefully weigh returns against other potential crises before deciding to participate in an investment.