If you’ve been in a casino before, you would know that the house always wins. Ever wondered how you can be the house? Well with GMX, you can!

GMX is a decentralized spot and perpetual exchange that supports low swap fees and zero price impact trades. Trading is supported by a unique multi-asset pool that earns liquidity providers fees from market making, swap fees and leverage trading. GMX is currently available on Arbitrum and Avalanche networks.

It is currently one of the fastest growing derivative protocols in terms of userbase, so let’s explore more about how it works and what makes it a serious competitor in this space.


GMX ecosystem has 2 tokens, $GMX and $GLP.

$GLP is a basket of assets used for swaps and leverage trading. It can be minted using any of the assets in the basket and burnt to redeem any of the asset. The price for minting and redemption is calculated based on the total worth of assets in the index including profits and losses of open positions divided by the $GLP supply.

What makes $GLP great is that it is typically made up of 50% stablecoins with the other 50% consisting of bluechips such as $ETH, $BTC, or $AVAX on the Avalanche ecosystem.

Additionally if traders lose money, a portion of the money is lost to $GLP holders. This was what we meant by "allowing you to be the house". Most traders lose money in the long run as shown in this chart below. On GMX, these traders are slowly losing money to you.


GLP Index Composition on Arbitrum

  • Ethereum (ETH) - 30%
  • Bitcoin (WBTC) - 15%
  • Chainlink (LINK) - 3%
  • Uniswap (UNI) - 1%
  • USD Coin (USDC) - 40%
  • Tether (USDT) - 3%
  • Dai (DAI) - 5%
  • Frax (FRAX) - 2%
  • Magic Internet Money (MIM) - 1%

GLP Index Composition on Avalanche

  • Avalanche (AVAX) - 15%
  • Ethereum (WETH) - 15%
  • Bitcoin (WBTC) - 15%
  • USD Coin (USDC.e) - 45%
  • USD Coin (USDC) - 9%
  • Magic Internet Money (MIM) - 1%

On Arbitrum, holders of the $GLP token earn Escrowed $GMX rewards and 70% of platform fees distributed in $ETH.

Similarly, $GLP holders on Avalanche earn Escrowed $GMX rewards and 70% of platform fees distributed in AVAX.

The fees distributed are based on the number after deducting the network costs of keepers which is usually around 1% of the total fees. The average APR is around 25-50% which is pretty high for such a strong basket of assets.

$GLP is specific to the network you mint it on, it is not directly transferable between networks and the price / rewards to the tokens will differ between networks. As $GLP holders provide liquidity for leverage trading, they will make a profit when leverage traders make a loss and vice versa.

Escrowed $GMX

As mentioned, holding $GLP gives you Escrowed $GMX ($esGMX) rewards, which can be used in two ways:

  1. Staked for additional rewards similar to regular $GMX tokens
  2. Vested to become $GMX tokens over a period of one year

Staked $esGMX tokens will earn the same amount of $esGMX and $ETH / $AVAX rewards as a regular $GMX token would. Escrowed $GMX is not transferable unless you are doing a full account transfer. The amount of $GMX or $GLP required to vest $esGMX is unique to each account and capped to the rewards received by that account.


$esGMX tokens can be converted into $GMX tokens through vesting, this can be accessed on the Earn page. When vesting is initiated, the average amount of $GMX or $GLP tokens that was used to earn the $esGMX rewards will be reserved.

For example, if you staked 1000 $GMX and earned 100 $esGMX tokens, then to start vesting your 100 $esGMX tokens, 1000 $GMX tokens will be locked up.

Similarly, to vest $50 esGMX, $500 GMX tokens will be reserved. $esGMX tokens that have been unstaked and deposited for vesting will not earn rewards, while staked tokens that are reserved for vesting will continue to earn rewards.

After the initial vesting, $esGMX tokens will be converted into $GMX every second and will fully vest over 365 days. $esGMX tokens that have been converted into $GMX are claimable anytime.

If a user sells $GMX or $GLP tokens and would like to vest their $esGMX rewards later on, they would need to re-buy the $GMX or $GLP tokens.

Tokens that are reserved for vesting cannot be unstaked or sold. To unreserve the tokens, use the "Withdraw" button on the Earn page. Partial withdrawals are not supported, so withdrawing will cause all tokens to be withdrawn and unreserve, as well as put any token vesting on hold. All $esGMX tokens that had been vested into $GMX will remain as $GMX tokens.

Multiplier Points

Multiplier Points reward long term holders without inflation. When you stake $GMX, you receive Multiplier Points every second at a fixed rate of 100% APR. 1000 $GMX staked for one year would earn 1000 Multiplier Points. Multiplier points can be staked for fee rewards by pressing the "Compound" button on the Earn page, each multiplier point will earn the same amount of $ETH / $AVAX rewards as a regular $GMX token.

When $GMX or $esGMX tokens are unstaked, the proportional amount of Multiplier Points are burnt. For example, if 1000 $GMX is staked and 500 Multiplier Points have been earned so far, then unstaking 300 $GMX would burn 150 (300 / 1000 * 500) Multiplier Points. The burn will apply to the total amount of Multiplier Points which includes both staked and unstaked Multiplier Points.

The Boost Percentage shown on the Earn page shows your individual boost amount from Multiplier Points. For example, if the $ETH APR is 10% and you have $10000 worth of $GMX and $esGMX, then the rewards would be $1000 annualized. If you additionally have an amount of Multiplier Points equivalent to 20% of your total amount of $GMX and $esGMX, your Boost Percentage would display as 20%, and you would get an extra $200 of $ETH rewards annualized.

esGMX Distribution Rate

Escrowed GMX will be distributed at the following rate starting from 1 Sep 2021:

  • 100,000 Escrowed $GMX tokens per month to $GMX stakers
  • 100,000 Escrowed $GMX tokens per month to $GLP holders on Arbitrum
  • 50,000 Escrowed $GMX tokens per month to $GLP holders on Avalanche from Jan 2022 - Mar 2022
  • 25,000 Escrowed $GMX tokens per month to $GLP holders on Avalanche from Apr 2022 - Dec 2022

Rewards are distributed every second to staked tokens.


Opening a position

Click on "Long" or "Short" depending on which side you would like to open a position on.

  • Long position
  • Earns a profit if the token's price goes up
  • Makes a loss if the token's price goes down
  • Short position
  • Earns a profit if the token's price goes down
  • Makes a loss if the token's price goes up

The maximum leverage available for the user is 30x. The trading fee to open a position is 0.1% of the position size, similarly there is a 0.1% fee when closing the position.

After opening a trade, users would be able to view it under your Positions list. Users can also click on "Edit" to deposit or withdraw collateral, this allows you to manage your leverage and liquidation price.

Closing a position

Positions can be closed partially or completely by clicking on the "Close" button.

For long positions, profits are paid in the asset you are longing, e.g. if you long ETH you would get your profits as ETH. For short positions, profits will be paid out in the same stablecoin that is used to open the position, e.g. USDC or USDT.



The current supply of $GMX at the point of writing is 7.55 million $GMX, with 6.55 million of the $GMX is currently staked. Price of $GMX is $37.84 with a market capitalization of $285 million. The increase in circulating supply will vary depending on the number of tokens that get vested, and the amount of tokens used for marketing or partnerships. The forecasted max supply is 13.25 million $GMX tokens.

Minting beyond the max supply of 13.25 million is controlled by a 28 day time-lock. This option will only be used if more products are launched and liquidity mining is required. A governance vote will be conducted before any changes.

  • 6 million $GMX from the XVIX and Gambit migration.
  • 2 million $GMX paired with $ETH for liquidity on Uniswap.
  • 2 million $GMX reserved for vesting from Escrowed $GMX rewards.
  • 2 million $GMX tokens to be managed by the floor price fund.
  • 1 million $GMX tokens reserved for marketing, partnerships and community developers.


Staked $GMX receives three types of rewards:

  • Escrowed $GMX
  • Multiplier Points
  • $ETH / $AVAX Rewards

30% of fees generated from swaps and leverage trading are converted to $ETH / $AVAX and distributed to staked $GMX tokens. As we previously mentioned, if you are staking on Arbitrum you would receive $ETH and if you are staking on Avalanche then you would receive $AVAX.

Note that the fees distributed are based on the number after deducting the network costs of keepers, this cost is usually around 1% of the total fees.


The current APR for staking on Arbitrum is 27.44%, with 16.75% in $esGMX and 10.69% in $ETH.


The current APR for staking on Avalanche is 29.10%, with 17.69% in $esGMX and 11.41% in $AVAX.

Valuations & Competitor Analysis


GMX is a great platform with amazing products suitable for people who want to trade on decentralized platforms with leverage of up to 30x. $GLP is another great innovation where people get exposure to healthy mix of blue-chip cryptocurrencies and stablecoins at the same time.

Yields are sustainable on $GMX and $GLP since they come from traders paying trading fees, as well as positions that are being liquidated. Compared to the usual stablecoin yields which are around 10-20% APR, where the yields are unsustainable since they are paying out using their native tokens.

As they begin to expand to other chains and offer more products, I believe that GMX can become a DeFi blue-chip platform in the future.