GMX, a Perpetual Trading Decentralized Exchange (DEX) that allows up to 50x leverage, is now generate It has higher transaction fees than BNB Smart Chain (BSC) and Bitcoin.
GMX is the third most active platform
According to statistics, on January 19, GMX daily fees were around $589,000, while BSC and Bitcoin on-chain fees during the same period were $524,232 and $328,935, respectively.
According to the above data, Ethereum and Uniswap are the only two major protocols more active than perpetually traded decentralized exchanges. During this time, the total amount of gas fees incurred on Ethereum exceeded $5 million. On Uniswap he made over $2.1 million, about four times his daily fees on GMX and BSC.
GMX supports trading various coins including BTC, ETH and AVAX. At the time of writing, GMX has a total trading volume of $96,802,651,673 and open interest, i.e. the number of open positions long and short, is $27,102,720. Meanwhile, over 208,000 active traders used the platform to trade on Arbitrum and Avalanche. GMX was launched on Arbitrum and Avalanche due to its scalability and low fees to Ethereum.
Arbitrum is Ethereum’s Layer 2 platform that enables scalable and low transaction fees. Avalanche, on the other hand, is scalable and boasts the fastest settlement times of any cryptocurrency. By launching on these two platforms, GMX says users will be able to save money by entering and exiting positions with minimal spreads and no price impact.
When traders go long, they sell USDC positions and quote tokens for profit. GMX pricing is based on Chainlink’s decentralized oracle to prevent price manipulation.
Transaction fees as a measure of activity
Transaction fees incurred by a dApp or blockchain are important activity indicators. Although users tend to choose protocols that offer near-zero fees, the decentralized nature of blockchain means that validators or entities protecting the core infrastructure must be compensated. increase.
Decentralized financial dApps such as Uniswap and GMX distribute transaction fees generated from swapping activities to Liquidity Providers (LPs). There are also governance tokens to be distributed. Anyone can become an LP.
In September 2020, Uniswap distributed UNI to users who exchanged tokens using the protocol prior to the airdrop distribution date. Currently, UNI is trading at his $6.1.
Interestingly for GMX, the daily transaction fee of $589,000 posted on January 19 is above the average total of $565,682 that has occurred in the past trading week. The same trend can be seen for the top five most active platforms. Extending this could represent renewed interest from users and traders using the protocol in some way.
On GMX, it could mean that more traders are posting traders looking to clip the market and make a profit. Coincidentally, the rise in transaction fees is recorded at a time when the cryptocurrency market appears to have bottomed out after losses. At least, that was the trend in 2022.
Featured image of GMX, chart from TradingView.com