🧐#GMX has been making waves recently.
❓Do you wonder how it works? Difference between $GLP and $GMX? How does #GMX protocol make revenue? What's $GLP APR?
👏To understand all of this and more in simple language, check out the 🧵
❓Do you wonder how it works? Difference between $GLP and $GMX? How does #GMX protocol make revenue? What's $GLP APR?
👏To understand all of this and more in simple language, check out the 🧵
#GMX is a decentralized derivatives exchange currently deployed on the Arbitrum One Layer 2 scaling solution and the Avalanche blockchain.
On GMX, users can
a) #Swaps
b) Trade going LONG or going SHORT）
c) Be Liquidity Providers
On GMX, users can
a) #Swaps
b) Trade going LONG or going SHORT）
c) Be Liquidity Providers
✅Going Long
Traders go long on an asset when they expect its value to increase
✅Going Short
Traders go short in expectation of being able to buy an asset back at a lower price. On #GMX , users can select between leverage of 1.1x to 30x on long and short trades.
Traders go long on an asset when they expect its value to increase
✅Going Short
Traders go short in expectation of being able to buy an asset back at a lower price. On #GMX , users can select between leverage of 1.1x to 30x on long and short trades.
🧐Trading is speculating on crypto price action and require little capital upfront to support very leveraged positions.
👏For example, if a trader deposited $1,000 worth of collateral to GMX, they’d be able to borrow up to $30,000 from its liquidity pool.
👏For example, if a trader deposited $1,000 worth of collateral to GMX, they’d be able to borrow up to $30,000 from its liquidity pool.
#GMX protocol has two tokens - $GMX and $GPL.
What’s the difference between them?
$GLP is the GMX platform's liquidity provider token. $GMX is the GMX protocol’s native governance and utility token.
What’s the difference between them?
$GLP is the GMX platform's liquidity provider token. $GMX is the GMX protocol’s native governance and utility token.
How can I buy $GLP?
GLP can be minted and burnt to redeem using any index asset. The index assets can be checked on GMX dashboard. It consists of a limited number of stablecoins and mainstream crypto currencies. The composition of the index differs between AVAX and ARB.
GLP can be minted and burnt to redeem using any index asset. The index assets can be checked on GMX dashboard. It consists of a limited number of stablecoins and mainstream crypto currencies. The composition of the index differs between AVAX and ARB.
Save💰 when minting $GLP
Check the fees for the respective index assets.
Fees vary as there is a target weight distribution of different tokens in the $GLP index. To get to the target, #GMX adjusts the fees for the particular index asset.
Check the fees for the respective index assets.
Fees vary as there is a target weight distribution of different tokens in the $GLP index. To get to the target, #GMX adjusts the fees for the particular index asset.
Any advice for buying $GLP on Arbitrum?
#Arbitrum is a layer2 scaling solution for Ethereum blockchain. At this time, it doesn’t have its own token yet. It might be cheaper to exchange your tokens on #Ethereum before bridging them over to Arbitrum.
#Arbitrum is a layer2 scaling solution for Ethereum blockchain. At this time, it doesn’t have its own token yet. It might be cheaper to exchange your tokens on #Ethereum before bridging them over to Arbitrum.
$GLP volatality
$GLP seems to be relatively less volatile than $GMX price. Can you explain why?$GMX is a listed coin, its price is dependent on demand and supply in the market. $GLP is liquidity provider coin, it’s not traded on exchanges.
$GLP seems to be relatively less volatile than $GMX price. Can you explain why?$GMX is a listed coin, its price is dependent on demand and supply in the market. $GLP is liquidity provider coin, it’s not traded on exchanges.
$GLP price
$GLP price is calculated as the sum of value of all assets in the index plus profits/losses of the traders divided by number of GLP tokens.
Since a substantial part of the assets in the index are stablecoins, the price is more stable.
$GLP price is calculated as the sum of value of all assets in the index plus profits/losses of the traders divided by number of GLP tokens.
Since a substantial part of the assets in the index are stablecoins, the price is more stable.
$GLP index on #Avalanche consists of AVAX, ETH, BTC and USDC. #USDC price is more or less stable. So increase in the price of ETH might increase the price of GLP, but it depends on the movement of the other non-stablecoin token prices in the index.
$GLP index composition on #Arbitrum and #Avalanche are different, so the prices are different too.
$GLP tokens are non-transferrable. It means you cannot send them between your own accounts, between Arbitrum and Avalanche or to someone else.
$GLP tokens are non-transferrable. It means you cannot send them between your own accounts, between Arbitrum and Avalanche or to someone else.
$GLP APR?
70% of net profits of GMX (after deducting referral rewards and the network costs of keepers) goes to $GLP holders, the rest 30% goes to $GMX holders.
GMX protocol’s revenue includes:
- Swap fees
- Borrowing fees on leveraged trading
- Minting and burning of $GLP
70% of net profits of GMX (after deducting referral rewards and the network costs of keepers) goes to $GLP holders, the rest 30% goes to $GMX holders.
GMX protocol’s revenue includes:
- Swap fees
- Borrowing fees on leveraged trading
- Minting and burning of $GLP
$GLP APR rate depends on the revenue of the GMX protocol, it’s re-adjusted every Wednesday.
Since $GLP holders are counterparty to traders, if traders lose money, it means revenue for GMX protocol and so profit for $GLP holders. Higher revenue means higher the $GLP APR.
Since $GLP holders are counterparty to traders, if traders lose money, it means revenue for GMX protocol and so profit for $GLP holders. Higher revenue means higher the $GLP APR.
What is $GLP index composition?
$GLP index composition means what’s the weighting (percentage) of individual tokens in the index.
$GLP index composition means what’s the weighting (percentage) of individual tokens in the index.
$GLP index composition can change?
Token weights are adjusted to help hedge $GLP holders based on the open positions of traders. For example, if a lot of traders are long $ETH, then $ETH would have a higher token weight.
Token weights are adjusted to help hedge $GLP holders based on the open positions of traders. For example, if a lot of traders are long $ETH, then $ETH would have a higher token weight.
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