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What is GMX?

What is GMX?

Explore GMX's unique decentralized trading platform offering high leverage on major cryptos and a robust ecosystem for traders.

Summary: GMX is a standout DeFi protocol providing secure, direct wallet trading with up to 50x leverage on popular cryptocurrencies like BTC, ETH, and AVAX. With its focus on low transaction fees, precise liquidation triggers through superior price feeds, and a rewarding ecosystem built around GMX, GLP, and GM tokens, it appeals to a wide range of traders and DeFi yield hunters. 

Operating on both Arbitrum and Avalanche networks, GMX exemplifies the versatility and efficiency of DeFi, all while fostering a community-driven growth model through thoughtful tokenomics.

GMX Overview
4.6 out of 5.0 by Datawallet
GMX is a decentralized trading platform offering up to 50x leverage on major cryptocurrencies, with a focus on security, low fees, and community-driven rewards.
Available Assets
BTC, ETH, UNI, LINK, USDT, USDC, AVAX and FRAX.
Fees
0.05% Maker and 0.07% Taker Fees.
Available Networks
Arbitrum and Avalanche Only.

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What is GMX?

GMX is a premier decentralized perpetual exchange for futures and spot trading of leading cryptocurrencies such as BTC, ETH, and AVAX, facilitating direct trading from user wallets. It offers up to 50x leverage, merging the flexibility of high leverage with the security and privacy advantages of decentralized finance (DeFi), eliminating the need for centralized custodians.

Key features of GMX include competitively low swap fees and minimized price impact, achieved through the integration of superior price feeds for precise liquidation thresholds, safeguarding users against market volatility. Operating on both Arbitrum and Avalanche, GMX offers a flexible trading environment. Its ecosystem is anchored by the GMX, GLP, and GM tokens, distributing trading fees to encourage active participation and liquidity, fostering a robust, user-led community.

What is GMX?

How Does GMX Work?

GMX operates on a decentralized model, allowing users to engage in spot and crypto futures trading directly from their wallets, bypassing the need for traditional centralized exchanges. This approach not only increases security by keeping users in control of their private keys but also enhances privacy and reduces reliance on third parties. Here's a breakdown of how GMX functions:

  • Trading with Leverage: GMX offers up to 50x leverage for trading top cryptocurrencies. Leverage allows traders to amplify their trading positions beyond their initial capital, increasing potential profits while also heightening risks.
  • Decentralized and Wallet-Based: Unlike centralized platforms, GMX does not hold users' funds. Traders connect their cryptocurrency wallets to the platform, maintaining full custody of their assets. This setup minimizes the risk of exchange hacks and unauthorized access to funds.
  • Price Feeds and Liquidations: To determine liquidations, GMX utilizes an aggregate of high-quality price feeds from multiple sources. This method protects traders from being unfairly liquidated due to temporary price wicks or manipulation on a single exchange.
  • Simple Swaps and Liquidity Provision: GMX simplifies opening positions through a user-friendly swap interface. Users can easily swap between supported assets to enter their desired positions. Additionally, the platform offers opportunities for users to provide liquidity through the GM and GLP tokens, earning a portion of the trading fees generated on the platform.
  • Cross-Chain Functionality: GMX supports trading on multiple networks, including Arbitrum and Avalanche, allowing users to choose their preferred network based on factors like transaction speed and gas fees.
  • Ecosystem Tokens: The platform's ecosystem revolves around three main tokens - GMX, GM, and GLP. GMX serves as the utility and governance token, accruing fees generated by the platform. GM is the liquidity provider token for GMX V2 markets, and GLP is for V1 markets, both earning a significant portion of the trading fees.

By combining these elements, GMX provides a secure, efficient, and flexible trading environment catering to novice and experienced traders in the decentralized finance (DeFi) space.

How Does GMX Work?

What Assets Are Tradable on GMX?

On GMX, the tradable assets are relatively focused, offering a narrower selection compared to other decentralized exchanges. On Arbitrum, the assets include WETH, WBTC, LINK, UNI, USDC, USDT, DAI, and FRAX. On Avalanche, tradable assets are WAVAX, WETH, BTC.b, WBTC, USDC, and USDC.e.

GMX Trading Fees

On the GMX platform, trading fees are set to either 0.05% or 0.07% for opening and closing trades, depending on whether the trade helps balance the pool's long and short positions. A trade that aids in maintaining equilibrium attracts a lower fee of 0.05%, while those that do not are charged at 0.07%. 

For swaps, the fees mirror this structure, with the same rates applying based on the swap's effect on liquidity pool balance. Specifically for stablecoin swaps, fees are reduced to 0.005% and 0.02%, promoting stablecoin transactions.

This fee model is designed to encourage a balanced and sustainable trading environment, directly benefiting GMX and GLP token holders by distributing part of these fees as rewards.

GMX Tokenomics

GMX tokenomics are foundational to the decentralized exchange, offering users and stakeholders a robust incentive structure and alignment with the underlying protocol:

  • GMX Token: Serving as both utility and governance token, GMX enables holders to influence platform decisions and earn a portion of trading fees, promoting long-term engagement and investment.
  • Fee Distribution: Owners of GMX tokens receive a share of the fees generated from trading activities on the platform, creating a direct link between platform success and token holder gains.
  • Staking Rewards: Staking GMX tokens yields additional rewards from the platform's trading fees in ETH on Arbitrum and AVAX on Avalanche, offering a passive income stream to supporters.
  • GLP Token: This liquidity provider token allows holders to earn from the fees generated in the platform's liquidity pool, rewarding those who contribute to market liquidity and efficiency.
  • Supply Strategy: The careful allocation of GMX tokens supports ecosystem growth, team incentives, and community rewards, ensuring a sustainable and balanced development path.
  • Governance Participation: GMX token holders play a critical role in shaping the platform's future, with governance rights that ensure community-driven development.

GMX's tokenomics craft a mutually beneficial environment for traders, liquidity providers, and token holders, fostering platform growth and sustainability in the DeFi landscape.

GMX Tokenomics

Bottom Line

In closing, GMX reshapes the landscape of decentralized finance by offering a platform where security meets innovation. It stands out for its commitment to user empowerment, leveraging blockchain to offer direct, wallet-based trading with up to 50x leverage across key cryptocurrencies. With features designed to reduce trading costs and protect against market volatility, GMX caters to a broad spectrum of traders. Its ecosystem, fueled by strategically designed tokenomics, ensures a vibrant community-driven future.

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