The number of coins circulating in the market and available to the public for trading, similar to publicly traded shares on the stock market.
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.
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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
However, GLP holders stand to profit when GMX traders go short and prices rise, GMX traders go long and prices decrease, and GMX traders go long and prices rise.
When the ratio of the Floor Price Fund to the Completa amount of GMX in circulation is lower than the market price of GMX, it will buy back and destroy the GMX in circulation so that the price cannot fall further.
Unlike most DEXs which use multiple single-asset pools, GMX utilizes a single multi-asset pool to facilitate all of their trades. This multi-asset pool is known as GLP and consists of several large cap tokens and stablecoins.
Among other things, it allows market participants to profit from price downturns, reduce risk in uncertain conditions, and bet big on an asset when they have conviction.
As GMX doesn’t yet handle billions of dollars of volume like its centralized counterparts, it’s currently a product best suited to small retail traders. Still, after rapid growth read more over recent months, GMX could soon attract the institutional market as more big players start to experiment with DeFi. With more room for growth ahead, it’s well worth keeping an eye on.
GLP’s price is contingent on the price of its underlying assets, as well as the exposure GMX users have toward the market. Most notably, GLP suffers when GMX traders short the market and the price of pool assets also decreases.
In conclusion, GMX is a promising copyright that offers a range of unique features and innovative technology. With its strong community, committed development team, and clear vision for the future, GMX is well-positioned to make a significant impact in the digital asset landscape.
GMX generates revenue through swap fees, borrow fees on leveraged trading, liquidations, and the minting and burning of GLP. These fees are split between GLP and GMX stakers.
Even as GMX takes the lead in the spot and perpetuals DEX space, the GMX team continues to build and develop new features for the platform.