Thread by @HandsOnDeFi

1) 👉Today i'm presenting you @GMX_IO👈

As i promised i will continue my #DeFi threads with #GMX and this time we'll focus on minting $GLP.

2) #GMX is a decentralized spot and perpetual exchange that supports low swap fees and zero price impact trades.

Trading is supported by a unique multi-asset pool that earns liquidity providers fees from market making, swap fees and leverage trading.

3) Dynamic pricing is supported by #Chainlink Oracles and an aggregate of prices from leading volume exchanges.

4) 🔑-Facts:

🪙-Ticker: $GLP
GLP is an index of assets used for swaps and leverage trading. It consists of the following assets:

5) $ETH, $wBTC, $LINK, $UNI, $USDC, $USDT, $DAI, $FRAX. For Arbitrum, holders of the GLP token earn escrowed $GMX rewards and 70% of platform fees distributed in $ETH.

6) Just as with with other perpetual dApps the vault is subject to traders PnL - and in the case of $GLP additionally to the volatility and the composition of the index token.

7) 📈My strategy📉

I opened a position in #GMX - precisely minting $GLP. This results in earning #GMX platform fees with given percentages in form of $esGMX and $ETH rewards.

Amount: $69,57
Timeline: 09.27.22 - 11.28.22
Tested blockchain: @arbitrum

8) 🏁My results🏁

Test period: 62 days
Rewards: $2.91
APY: 24.72%

9) ⭕️My analysis⭕️

I minted $GLP 62 days ago. In the test period the pool generated an #APY of 4.7% in $esGMX and 20.0% in $ETH. The $GLP token price started at $0.906, ranged from $0.7922-$0.951 and is now at $0.8154.

10) Neglecting the $esGMX APY in terms of monetizing it in the short-term the pool generated a ROI of -6.7%. This is due to the price decrease of the $GLP token.

11) As $GLP includes several bluechips it is surely a bet on the general crypto market development. As it partially contains stable coins, downside risk is mitigated and upside potential is limited.

12) As I don't want to miss out on future price pumps and want to limit my downside risk at the same time, it is a good way of crypto exposure under the current market circumstances.

13) Even though my test results showed a negative ROI after 62 days it is really encouraging that the test pool generated 20% APY in $ETH rewards. On top of that the pool generated 4.6% in $esGMX which gives long-term exposure to the protocol itself.

14) If $ETH price had not dropped since the pool start, the APY would have been even higher at about 23%.

15) I'm currently building a passive income strategy and I will include minting $GLP in my portfolio strategy.