GMX is a new generation cryptocurrency perpetual exchange with a sophisticated liquidity system using Arbitrum and Avalanche (AVAX) which already has over 120,000 users. So what’s so special about GMX’s offering in 2022 — how does it set a new benchmark for DeFi?
What is GMX, crypto decentralized perpetuals exchange: Basics
Since its first mainnet launch on Ethereum Arbitrum in late Q4 2021, GMX has established itself as one of the most technologically advanced DeFi ecosystems on EVM-compatible blockchains.
- GMX is a decentralized cryptocurrency exchange focused on perpetual contracts;
- The GMX platform is designed to enable spot and leveraged trading of Ethereum (ETH), Wrapped Bitcoin (WBTC), Avalanche (AVAX), Chainlink (LINK), Uniswap (UNI) and other tokens up to 30x to allow leverage;
- GMX supports centralized USD Tether (USDT), USD Coin (USDC) and decentralized (Dai (DAI), Frax Finance (FRAX)) USD-pegged stablecoins;
- GMX token supports GMX cryptocurrency exchange token economics; The platform’s “Earn” module unlocks a variety of passive income opportunities, including staking, vesting, and more.
As such, GMX can be used for asset conversion, leveraged trading, and on-chain staking of cryptocurrency tokens.
Despite the painful recession the blockchain market has experienced, in the third quarter of 2022 alone, it processed nearly $60 billion in transaction volume across two blockchains.
What are perpetual contracts and why are they popular?
Perpetual contracts are derivatives that derive their value from the rates of an underlying asset.
For instance, indexes like the S&P 500 price or Tesla stock price can be used for perpetual contracts. This is because index contracts can be closed whenever a trader wants to. Stock, commodity and index contracts also fall under this broader class of futures contracts without an expiration date. Conceptually, cryptocurrencies work the same way as perpetual contracts.
Take the contract on the Bitcoin USDT pair, for example. Its value is derived from the current price of Bitcoin, or BTC. And it can be closed at any time with no expiration date set. Leverage increases the effectiveness of deposits and borrowing. For example, someone with $100 can open positions for $3,000 with 30x leverage. In cryptocurrency, derivatives contracts often come with high leverage options.
How does GMX work?
GMX is a decentralized cryptocurrency perpetuals platform launched on Arbitrum and Avalanche. That being said, GMX platform is:
- 360° on-chain: the platform doesn’t use centralized storages for keys or crypto;
- Available for spot (with no leverage) and margin (with up to 30x leverage) trading enthusiasts;
- ‘Out-of-a-box’ one: no installations and downloads are required;
- Cross-platform service: both Avalanche (AVAX) and Arbitrum (Ethereum-based) wallets can be used for trading;
- Multi-product ecosystem: Web3 enthusiasts can trade perpetuals and spot positions and earn on their passive crypto without leaving single interface;
- Fiat-friendly exchange: GMX supports seamless integration with Banxa’s paygate for Visa, MasterCard and bank accounts.
To start trading, users should connect their Arbitrum or Avalanche wallets to GMX; MetaMask, Coinbase Wallet and TrustWallet are compatible with the exchange.
GMX Ecosystem: Array of community-driven crypto products
Also, GMX supporters released a number of fan content collections on NFT marketplaces, traders leaderboards and other community-first developments.
Enthusiasts of the GMX protocol create a vibrant and functional ecosystem thanks to their creation of app-specific Telegram bots, staking calculators, yield simulators and more. These functions help the users of the GMX protocol gain a competitive edge and increase profitability. Several community-first projects and NFT marketplaces were initiated by GMX supporters. They also created trader boards and unofficial content collections.
