GMX: What Is It And Should You Buy It?

Crypto enthusiasts have shown a keen interest in the GMX token. For those unaware, it is the native token of the trading platform with the same name. As the asset makes its way to Binance, FTX, and others, now is an excellent time to see why the excitement is building lately. 

What Is GMX?

As the name suggests, GMX is another cryptocurrency-oriented trading platform issuing a native token. However, it is a decentralized perpetual and spot exchange enabling the team to tap into two different yet highly liquid markets. Users of the GMX platform will benefit from low swap fees and trading with zero price impact. Having such benefits in a decentralized environment will always warrant some optimism.

Users can trade various assets on the platform, including Bitcoin, Ethereum, Avalanche, etc. More importantly, those who want a more “degen” approach to crypto volatility trading can leverage their position up to 30x. Gaining more market exposure can yield more significant profits, but the losses will pile up quickly if momentum sours. 

Some may argue that leveraging on a decentralized exchange is not the right way. Centralized platforms have shown there may be issues with margin trading now and then, requiring manual intervention. Through a DEX, there is no real oversight. Thus GMX will have to provide a buttery smooth trading experience. Time will tell if they can deliver on that front. 

Many users see the appeal of reducing liquidating risks, saving on costs, and more straightforward swaps. A convenient interface caters to novice and advanced users. Moreover, traders can exit and enter positions with minimal spread and acquire optimal pricing. In addition, GMX runs on Arbitrum and Avalanche, indicating it may support other networks moving forward.

A Utility & Governance Token

Like other platforms, the GMX exchange has a native token by the same name. That token awards utility and governance benefits and provides a passive revenue stream to holders. Thirty percent of GMX’s generated fees are distributed to token holders, creating an incentive to hold the asset for extended periods. Moreover, it creates a reason for users to share the platform with others, as they gain more from higher fee generation. 

As the token resides on Arbitrum and Avalanche, users can stake it to accrue more passive revenue. APRs will differ over time but remain well above 10% at the time of writing. Staking GMX tokens earns rewards in escrowed GMX, multiplier points, and ETH/AVAX rewards. The latter pertains to the fee generation distribution. However, Avalanche stakers receive AVAX, whereas Arbitrum stakers receive ETH. 

The trading platform has a secondary token, called GLP, the liquidity provider asset. Unlike GMX, GLP will accrue 70% of the platform’s generated fees. It, too, can be staked on both blockchains, with APRs hovering near 20%. In addition, holders earn escrowed GMX rewards and fee distribution in ETH/AVAX. 

Big Exchanges List The $GMX Token

This week has all been about major exchanges opening trading pairs for $GMX. That list includes Binance and FTX, with more platforms likely to follow. New exchange listings will often spark short-term price momentum. However, interest in this decentralized platform has been palpable for several months. As a result, it is one of the better-performing crypto assets of Q3 2022. 

With several core training pairs opening on these big platforms, momentum can swing either way. There will be some short-term volatility, creating money-making opportunities. It all comes down to getting more people to use the GMX decentralized spot and perpetual platform. That will ultimately decide its current and future success. 

None of the information on this website is investment or financial advice. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website.

JP Buntinx

JP Buntinx has been writing about cryptocurrency since 2012. His interest in crypto, blockchain, fintech, and finance allows him to cover a broad range of different topics.

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JP Buntinx

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