2 years ago

OVERVIEW
GMX is a decentralised exchange that offers spot and leverage trading. It’s one of the few reputable DEXes that offers leverage trading. It uses Arbitrum’s L2 and Avalanche, with most of the volume going through Arbitrum. Platform fees are distributed to stakers in the form of ETH/AVAX, which is really a unique feature.

THINGS I LIKE
User friendly interface and very well put together dashboards and stats about the DEX.
Over 80% of GMX tokens are staked and can earn interest in ETH.
GLP is another platform token which acts like a liquidity provider. Buying and staking it gets you 16% APR in ETH
DEXes volume has been steadily growing even through the bear market and I think this trend will continue - https://www.theblock.co/data/decentralized-finance/dex-non-custodial/dex-to-cex-spot-trade-volume
Buying GMX/GLP and staking it is like having a part of a casino. Most traders don’t make money, but they still pay fees. GMX gives you an opportunity to take part in this.
There has been a stable inflow of new users. Although the numbers are low (500-800 per day), There hasn’t been a significant outflow during the bear market.
GMX just got listed on Binance and FTX.

MY CONCERNS
Not that many users are familiar with Arbitrum and Avalanche. I believe this limits the number of new users, due to the additional hurdle of adding these networks to MetaMask, swapping between networks and so on.
Uniswap is currently over 50% of all DEX trading volume. Just for comparison, on a bad day (Oct 9) Uniswap trades about $359 million in volume, GMX trades about $28 million. If they decide to add leverage trading, GMX will have a massive competitor.
I’m not that technically proficient to completely understand what the potential losses will be for stakers of GLP. If many people go long or short with high leverage and actually win, this means the platform needs to pay up. While there are caps on how much liquidity is available, this is still a concern. I’ve had this happen to me in the past. I had a leveraged long on BTC and the exchange closed my position during the bull run.
Total supply should be 13.25 million GMX, but there are ways to increase this.

FINAL THOUGHTS
If the L2 narrative I’ve been talking about plays out, Arbitrum has the potential to grow exponentially. It’s one of the most used L2s and when it comes to DeFi, Total Value Locked is similar to Polygon, Avalanche and Optimism. Around $1 billion for each, while ETH L1 has about $30 billion TVL. The ability to earn ETH when staking GMX is really a unique selling point and can attract more people. Although the exchange will attract mostly pure crypto people that don’t like to KYC and want to YOLO into 20x leverage, I still think there will be plenty of those in the next bull run. I’m gonna dollar cost average into GMX for a longer-term play. IT won’t be a huge position size due to the risks, but I’m willing to park some capital and wait. I haven’t played around with the staking, but once I buy some GMX, I’ll let you know how it goes.

RESOURCES
https://gmxio.gitbook.io/gmx/
https://stats.gmx.io/
https://app.gmx.io/#/dashboard
https://defillama.com/chains
https://medium.com/@gmx.io

This video is for educational and informational purposes only.
I'm not a financial advisor.
Cryptocurrencies are high risk assets. Be aware of the risks before you decide to invest in any of them.
Do your own research and don't follow anyone blindly.

0:00 Intro
0:25 What is GMX?
2:25 Things I Like
8:15 My Concerns
15:51 My Thesis
18:41 Price Potential