Thread by @DeFi_Dumbledore

Arbitrum season has taken over ‼️

Let's talk about $GMX :
⭐️One of the BACKBONE protocols of @arbitrum
⭐️The main reason why other options/perp trading platforms have migrated over to Arbitrum
⭐️ Massive potential BULL or BEAR market

Keep reading ⬇️⬇️⬇️

1/ This thread will cover:
⦿ @GMX_IO recent performance
⦿ Overview on liquidity mechanics
⦿ Understanding how to play $GLP
⦿ The 'Real Yield' narrative
⦿ Limitations & Risks
⦿ Catalysts and Bullishness

2/ How has the GMX platform been performing?

Over these last 2 months (Sept 7th - Nov 7th):

⦿ Over $13 billion in total volume
⦿ Accrual of over $18 million in fees
⦿ Net PnL : - $8.6 million (good for $GLP holders)
⦿ Over 50,000 new users

3/ These metrics are showing tremendous growth in users and volume, resulting in consistent fee generation. All this in a bear market 🤔

Also TVL growth is looking steady:

https://twitter.com/DuneAnalytics/status/1585676294817284096?s=20&t=8oPpxo8zE3Szk6-ZFfzT9Q

4/ How does liquidity work for GMX?

Instead of traditional liquidity pools, GMX has $GLP which is a basket of assets (Mainly BTC, ETH & stable coins).

A user can mint $GLP using $BTC, $ETH, $USDC or any other asset that the index contains.

5/ There is no max supply of $GLP because it is either minted/burned.

Users are incentivized to hold & stake $GLP through an ~20% APR:

Currently 17% APR in $ETH and 2% APR in $esGMX

More about $esGMX here : gmxio.gitbook.io/gmx/rewards

6/ How to play $GLP?

There are a couple scenarios that can impact $GLP price:

7/ Traders that profit from their trades are literally paid from the $GLP pool.

Traders profit = GLP holders lose.
Traders lose = GLP holders gain.

Historically, traders tend to lose so this is good for $GLP holders.

8/ How is GMX providing us with 'Real Yield'?

⦿ 100% of platform fees are paid out to $GMX/ $GLP stakers.

▶️ Note: Yes, they are not just paying rewards in a native token to inflate supply, this is REAL profit being distributed.

9/
⦿ On top of that , $GMX / $GLP rewards are mainly in $ETH
⦿ $esGMX is a reward token instead of directly emitting $GMX, this forces users to stake $esGMX or vest it.
⦿ Rewards are set up to benefit long-term holders (multiplier points).

10/ @GMX_IO is going to be a zero-emission protocol very soon.

@crypto_condom said it well:

https://twitter.com/crypto_condom/status/1564354297168625665?s=20&t=yp3lR5bw4bS_9McAoYf_Nw

11/ Limitations and Risks

⦿ Limited assets for trade (only 4)
⦿ If traders do profit more, $GLP price will be impacted🔻 (usually not the case).
⦿ If the volume does slow down, fewer fees will be generated = less yield for $GMX / $GLP. (If competitors capture market share)

12/ Catalysts and Bullishness!

⦿ Synthetics —> more users, more volume & more fees
⦿ New AMM design + Dex Aggregator
⦿ GMX looking to enter more chains
⦿ The biggest BULLISH sign is that other protocols are building on top of GMX and this will continue. $GMD $DOPEX

13/ My Thesis

@GMX_IO holds the crown 👑 for perps on Arbitrum. Users are familiar with it and they like the platform.

As more assets & functionality are introduced there is more opportunity for new users = more volume = more fees accrued = more rewards for $GMX / $GLP.

14/ A lot of attention is on Arbitrum and new protocols are popping up but the fundamentals of @GMX_IO are really strong and will succeed in the long term (even with some healthy competition).

15/ I will be writing about the different protocols using GMX's tokens and reward system as a base for their protocol.

Delta neutral strategies and real yield narratives have been trending so follow to learn more and keep up with Arbitrum and current narratives ✨

Here are some of the Arbitrum fam to follow:

@LouisCooper_
@ChadCaff
@CryptoKaduna
@mohoicohoo
@andrewsaunders
@BillyBobBaghold
@crypto_condom
@Crypt0_Andrew
@CryptoHawk19
@0xWolff

Here are some great threadors and educators:

@crypthoem
@drakeondigital
@Gemhunter9000
@rektdiomedes
@resdegen

#Arbitrum #GMX #GLP #RealYield #Defi #Crypto #Perps #L222 #arbitrumSZN #ARB