As Arbitrum launched its airdrop event, the market attention has also been attracted by Arbitrum’s dynamic ecosystem, in which the TVL of GMX took the lead light years ahead of other projects.
By selecting and answering certain questions that all users are concerned about, we would also like to briefly introduce GMX to all users as well.
What Is GMX?
GMX can be simply defined as a decentralized leverage trading platform.
GMX offers 30% of its platform fee as bonus for its users, and the total circulation of GMX is restricted by a hard cap, which means that GMX can be simply understood as the token issued by the exchange platform that distributes bonuses to its users.
Trade on GMX
When did GMX Release Its Tokens? What Was GMX’s Issue Price? What’s The Token Distribution Model of GMX?
- GMX was launched on September 1st, 2021
- GMX was merged from two projects, namely XVIX and Gambit, there was no issue price for GMX.
- The total supply of GMX is 13.25 Million, the token distribution model of GMX is listed as below:
For detailed information, please refer to the link below: https://gmxio.gitbook.io/gmx/tokenomics#supply
Which Users Are Recommended To Buy GMX?
Those users who maintain a long-term bullish outlook for the platform.
How To Buy GMX？
- You may buy GMX on Hotbit. GMX/USDT | Hotbit Link For RegistrationRegister
- Stake Here Earn，whenever you want, just click Compound, and you will receive the bonus distributed by the platform in ETH/AVAX。
What Is GLP？
The platform distributes 70% of its platform fee as bonus to its users, the total circulation of GLP is not restricted by any hard cap, and that GLP tokens can be minted unlimitedly, which resembles the Pool LP of AMM, GLP can be understood as a type of enhanced index product which is half mainstream token and half stablecoin.
Which Users Are Recommended To Buy GLP?
Those users who intend to hold half mainstream tokens (BTC/ETH 50% each) and half stablecoins with interest rate being over 20%.
How To Buy GLP？
- You may buy GLP by clicking here only, please note that the rate of transaction fees can be different when you trade in different token types! You may first transfer your tokens into another type of tokens with a lower rate of transaction fees and then conduct your transactions again.
- Earn here and click Compound whenever you want.
How Can I View My Interests Generated From The Staking of GLP?
The interests of GLP are reflected in the “Total Rewards” tag of Earn section, the rewards displayed are the total rewards of both GMX and GLP rewards.
Does The Price of GLP Fluctuate Based On The Values of Tokens In The Pool?
The price of GLP is determined by two aspects:
- The price of tokens in the pool
- trader’s interests
The loss of traders on GMX platform will be the gain of GLP, and vice versa.
The Relationship Among GLP Price / Index Price / Trade PnL in stats.gmx.io:
- GLP Price: The price of GLP, which applies to the buy and sell of GLP.
- Index Price: The index consists of 25% BTC+25% ETH+50% USDC, which represents the performance benchmark of GLP, in another word, it is expected that the overall expected performance of GLP will exceed the index. As a matter of fact, the asset combination in the GLP pool will get close to but never be exactly the same as the index.
- Trader PnL: Trader’s incomes, just as mentioned above, the loss of traders on GMX platform will be the gain of GLP, and vice versa. Hence, the decline of Trader PnL is beneficial to GLP Price, the exact calculation formula is: Trader PnL/GLP AUM = GLP Price Change (Trader part of influence).
FAQ of exGMX
30% of all transaction fees generated on the platform will be allocated to all GMX holders, which contains the proportion of ETH only, as it will be originated from genuine transactions conducted by users, and that all esGMX are allocated to you as extra bonuses according to the plan.
From September 1st, 2022 — the end of 2022, in case that the APR of GLP is higher than 20%, no esGMX incentives will be distributed, in case that the APR of GLP is lower than 20%, the sysstem will distribute certain volume of esGMX to all users to make up the deficit so that the APR will reach 20%, with 50,000 esGMX to be distributed in every month,
More detail: GMX Proposal: Update esGMX Emissions (snapshot.org)
Now That I have staked GMX, how can I receive my exGMX bonus?
You may find your esGMX reward(s) in the tag of “Total Rewards” in Earn section, and you may click on “claim” to transfer the reward(s) into your own wallet(s). By clicking “Compound”, you may stake your reward(s) to earn bonus(es).
How to sell esGMX? What Else Can I Possibly Do By Saving It In My Account?
You may cancel the staking of your GMX at any time.
The cancellation of your GMX staking may lead to the fact that you may not be able to unlock the esGMX tokens that you might receive as incentives.
- You may unlock the rewards after vesting for one year at the bottom of Earn section. Note: In order to be qualified for unlocking your rewards, you must hold all your GMX/GLP positions by the time you receive all the esGMX incentives during the vesting period.
- We strongly recommend you to read all detailed information provided by the link here: https://gmxio.gitbook.io/gmx/rewards#vesting
- The requirement of obtaining bonuses for staking esGMX is exactly the same as staking GMX for bonuses, the users may simply receive the bonuses by staking their tokens.
- esGMX enjoys voting power.
APR of GMX Stake
- The APR of GMX Stake = Annual Rewards / Total Supply of GMX Stake, the rewards include two portions, which are the rewards of wETH and the rewards of esGMX. (On AVAX, the rewards will be wAVAX rewards).
- wETH: Originated from 30% of the fees and charges received by GMX platform, the relevant fees and charges of the platform include all relevant fees and charges such as stocking trading transaction fees, leveraged trading fees, loans of leveraged trading, liquidations and punishments and minting and destruction of GLP etc.
- esGMX: According to the token distribution model, by the time the project was launched, 2 million esGMX tokens were reserved as incentives, and this part of the tokens are gradually being distributed to all GMX/GLP Stake users. Starting from September 1st, 2022 — the end of 2022, in each month, the system has distributed 50,000 esGMX to GMX Stake users in total. Please refer to the link below for further details: https://snapshot.org/#/gmx.eth/proposal/0xb370249628b2226c6a7e771b2959c3b2e80eada36ad3618a7fc39f964213643e
- What makes GMX different from most of other protocols is that a comparatively large proportion of GMX’s APR consists of platform fees instead of incentives generated from the additional issuance of the project’s tokens. Hence, the APR of GMX is considered as a “genuine income” that is more sustainable.
- Compared with traditional stock shares, wETH resembles dividend, and esGMX resembles stock dividend. Nevertheless, GMX itself is not a type of stock shares, and the above comparison is only an analogy.
- The APR of GMX and wETH is also pegged with the valuation of GMX. According to the chart below, P/S = The Total Circulation of GMX / Part of wETH’s Income, it is obvious that the data has been maintained at a relatively stable level within the past 6 months. However, the valuation is very likely to change in the future. Currently, by comparing horizontally with other DeFi protocols, the valuation of GMX is comparatively low.
Mechanism of Update
- app.gmx.io/#/earn is updated every Wednesday
- The rewards are distributed in real-time, if you want to calculate the APR faster
- You may calculate the APR based on the rewards you have actually received
- The “APR*70%” in the “AUM Performance Annualized” module of stats.gmx.io is known as the APR of GLP by that day (which does not include esGMX).
The Advantages of GMX Compared With Traditional CEX:
- No slippage trading: the pricing of GMX is based on oracle machine, and there is no slippage involved, which is friendly to transactions of huge volumes.
- Transparency: GMX is known as a smart contract with open-source codes, which does not involve the risks such as the boss of a centralized platform absconded with all money etc.
- Deposit and Withdrawal: GMX does not require the process of deposit or withdrawal, which reduces the time and friction cost involved in deposit and withdrawal.
- Composability: Other protocols may build their products based on GMX, which thus brings more traffic for GMX.
The Disadvantages of GMX And Solutions:
- The price feed is originated from inside the system, which involves the risk of internal misconduct (Solution: Launch low-latency price feed model by collaborating with Chainlink)
- The scale of transactions are restricted to double impacts of both zero slippage and external liquidity (Solution: Add the new function that allows the dynamic adjustments of slippages based on the volume of long and (or) short positions and fund rate, as such function supports much larger scale of transactions compared with the zero slippage system, which is due to the fact that such function may greatly increase the price cost and reduce risks under larger scale of transactions).
- It is not very convenient for the system to list too many non-mainstream tokens, as the listing of so many of such tokens and mixing them in GLP will reduce overall security level (Solution: Build independent liquidity pools, with each pool targets at one transaction pair and undertakes the risks of the transaction pair only, which is more convenient for listing such tokens).
Considering the fact that the concept of Layer2 continues to gain more popularity, as Arbitrum being one of the representatives of Layer2, GMX will undoubtedly receive the attention from the public. The manager of GMX understands the advantages and disadvantages of itself, and the team is continuing to take relevant measures to improve the project as well. The direction towards GMX’s future iterations is also clear, and we believe that the security level and scale of GMX transactions will continue to grow over time.