There needs to be a reduction in transaction costs to get more people willing to trade, which creates a positive cycle where more fees and revenues attract more liquidity.
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 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.
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.
$GMX is the protocol’s utility and governance token. $GMX has a forecasted maximum supply of 13.25 million tokens, which can be increased if there are more products launching and liquidity mining is required. But that will be subjected to a governance vote before any changes.
GMX is built on the Arbitrum, and Avalanche GMX provides trading services for spot and perpetual contracts on the chain. GMX supports up to 30x leverage, and users can enjoy low transaction fees and near-zero spreads.
Liquidity providers can deposit single copyright to obtain GLP tokens or redeem previously deposited copyright with GLP tokens. GLP liquidity pools are immune to impermanent loss problems because the quantitative rule constraints of algorithmic quotes do not constrain them.
GMX tokens can be bridged between the Ethereum and Arbitrum networks. However, there is a 7-day waiting period when tokens will be not accessible during the bridging process.
The Innovation Zone is a dedicated trading zone where users are able to trade new, innovative tokens that are likely to have higher volatility and pose a higher risk than other tokens.
Summary: Traders in highly regulated regions like the USA and China face increasing challenges in accessing copyright futures markets without identity verification.
Trading fees and bid-ask spreads are liquidity providers’ primary income sources. However, those who buy and sell frequently and in big quantities prefer lower costs, tighter bid/ask spreads, and greater market depth.
There are multiple competitors within the DeFi space that also offer perpetual futures. At the same time, there is the looming threat of centralized read more exchanges that will always have a portion of the market share.
Drift is Solana’s leading decentralized perpetual futures exchange, offering a broader range of 36 trading pairs compared to its competitor Jupiter, which handles more volume but only supports BTC, ETH, and SOL.
GMX is a blockchain-based project that operates as a decentralized spot and perpetual exchange. It allows traders to trade their cryptocurrencies directly from their wallets.
Many decentralized exchange aggregation protocols also benefício the zero transaction spread of the GMX protocol. Yield YAK, a revenue aggregation protocol on the Avalanche blockchain network, has more than 35% of its trading volume done through the GLP liquidity pool.