Many decentralized exchange aggregation protocols also favor 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.

The GMX project has a clear roadmap for the future. The team plans to introduce new features and enhancements to the GMX network, with the aim of making GMX a leading copyright in the digital asset landscape.

This means that if the user chooses to vest 100 esGMX tokens which they had earned from staking 1000 GMX tokens, the user will have to stake the 1000 GMX tokens through the vesting cycle. This reduces selling pressure on GMX and GLP as users are forced to stake their tokens through vesting.

Users can add liquidity by minting GLP, and in return, they receive 70% of all fees generated on the corresponding blockchain. Unlike some liquidity pools, GLP experiences pelo impermanent loss.

1) GMX/ETH liquidity is provided and owned by the protocol, the fees from this trading pair will be converted to GLP and deposited into the floor price fund

GMX tokens can be purchased on decentralized exchanges such as Uniswap or SushiSwap. For this guide, we’ll use GMX as an example. Visit the GMX app website, connect your wallet and click on “Swap” to start trading.

On the surface, the GMX protocol fulfills the wishes of almost all liquidity providers: long-term, stable, low-risk, high-yielding gold flows. But the truth is less rosy than it seems because GLP liquidity pools are more than just deposits and lending like banks. Their excess returns well above the general market interest come from traders’ forfeited margin, and the increased risk taken is traders’ profit.

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* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.io.

The token also facilitates fee payments for trading operations and grants holders governance rights, allowing them to participate in decision-making processes regarding the development of the GMX platform.

All copyright holders contribute to the Completa liquidity, whereas speculative traders and users with a net demand for buying and selling are responsible for most of the trading activity. However, there is often friction between the wants and demands of those who offer liquidity and those who buy and sell transactions.

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 click here inflow of revenue.

Because the GMX protocol improves the traditional liquidity pool model, users of the GMX exchange may benefit or be at risk depending on what decentralized financial services they use and what role they play in the GMX exchange.

Regarding protocol development, the GMX exchange has also issued GMX tokens. GMX tokens can be used for the protocol’s governance and staking, to adjust the rate structure and the weight of different copyright assets that affect the GLP liquidity pool, and to receive 30% of the transaction fees, funding rates, and clearing fees in the GLP liquidity pool. The proceeds are directly converted to ETH or AVAX.