We briefly discuss below the advantages and disadvantages of the GMX protocol for three types of users: users of exchange assets, liquidity providers, and speculative traders. What are the advantages and disadvantages?
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Additionally to this, you will also earn escrowed GMX (esGMX), which are "locked" GMX tokens. If you decide to "unlock" these esGMX tokens, they will fully vest over 365 days and turn into regular claimable GMX tokens.
But is a trader bound to lose money? What if the opponent is from a top quantitative trading team or a famous hedge fund trader? Is Soros confident that he can win and not lose when he sits across from you? Although the rate rules favor liquidity providers, there is pelo guarantee that extreme cases of huge liquidity losses will not occur.
So why would traders still want to use the GMX protocol for trading? Because the market depth of GMX is excellent, and there are no slippage problems. Because the profit of trading is from the spread trading, using the order book trading or AMM liquidity pool trading will be due to a large amount of buying or selling to increase costs or reduce profits, but through the GLP liquidity pool to open.
GMX is committed to complying with all relevant regulations and laws. The project works closely with regulatory bodies to ensure that GMX is a safe and legal digital asset.
The launch of GMX V2 further solidified GMX’s position in the decentralized exchange sector, attracting more users and liquidity.
While Jupiter offers up to 100x leverage, Drift stands out by providing more diverse trading opportunities with maximum leverage of 20x.
In that case, suddenly, a large number of users in the market using USDC stablecoins to buy LINK tokens in stock, the number of LINK tokens in the GLP liquidity pool will decrease dramatically, and the increased click here utilization of funds will prompt the contract to go long. The funding rate of LINK will rise rapidly. In other words, the price impact of large transactions on the liquidity pool is still there, but the cost is passed on to traders as funding rates.
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GMX is a decentralized exchange that supports spot and perpetual contract trading. It encourages users to deposit copyright assets into a liquidity pool to become market makers and earn transaction fees.
Protocol revenue is split 70/30 between $GLP and the other protocol token $GMX. In addition to getting the larger share of protocol revenues, $GLP holders also get all the collateral when positions are liquidated which leads to a fluctuating but over-time growing inflow of revenue.
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As long as there is liquidity in the pool, the exchange will complete the transaction without the risk of not finding a counterparty to match and being unable to trade.