Part 8 of my deep dive research series will be on @GMX_IO
Can the blueberry army propel $GMX to new heights??
The purpose of this deep dive series is to analyse a number of popular projects and rank them against a set framework. I outline my DYOR framework below.
As I complete each project, I will update and track scores on my google sheet. You can view for free below. https://docs.google.com/spreadsheets/d/1mPGbrsSEqBCN4lTVIIfdu3UzhZVqGP6LWMXlJrWJ5RE/edit?usp=sharing
Let’s dive in…..
Price = $63.89
Market cap = $540m – Rank 88
Decentralised Perp Exchange
Arbitrum and Avalanche
All time high = $76.77 (-17%)
All time low= $11.53 (+455%)
GMX is a decentralized spot and perpetual exchange that supports low swap fees and zero price impact trades. It has been one of the superstar performers during the recent bear market and has captured the attention of crypto degens and investors alike.
Here is a great thread by @thelearningpill to get you up to speed on the project.
Revenue
Over the past 180 days, GMX sits in 5th position for revenue generated amongst all other dapps and chains according to @tokenterminal .
Daily revenue currently sits at around $82k and daily fees at $275k. Both continue in a strong uptrend sinch the official launch in 2021.
9 for Revenue.
Treasury
The GMX token has a floor price fund in ETH and GLP (like a treasury) and its purpose is to ensure liquidity in GLP and provide a reliable stream of ETH rewards for all staked GMX. The fund grows in 2 ways.
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
50% of funds received through Olympus bonds are sent to the floor price fund, the other 50% is used for marketing
Currently, the fund has just over $3m in it. The project is quite young and this will build over time. Compared to other projects its size, this is a relatively small treasury.
7.5 for Treasury.
Tokenomics
It is important to note there are 2 main tokens associated with GMX
According to coingecko, these are the current supply stats for GMX
Circulating supply = 8.455 m
Total supply = 13.25m
Market cap = $540m
FDV = $846m
Market cap/ FDV = 0.64
GMX was one of the pioneers of the real yield narrative last year. Stakers receive rewards in the form of
Escrowed GMX (esGMX)
Multiplier Points
ETH / AVAX Rewards (30% of fees generated from swaps/ trading)
Currently there are 79% of GMX staked earning 8.22% APR.
GLP consists of a basket of assets that are currently tradeable on the platform. When you buy GLP with ETH, USDC BTC etc you are essentially providing liquidity to the protocol.
You are incentivised to hold your GLP tokens as you will be rewarded with
Escrowed GMX
ETH / AVAX Rewards (70% of fees generated from swaps/ trading)
These clever tokenomics help to provide long term sustainability for the users of the protocol.
9 for tokenomics.
Locked up funds
There is a forecasted max supply of 13.25 million GMX tokens and currently around 64% of these in circulation.
6m- XVIX and Gambit migration
2m - paired with ETH for liquidity on Uniswap
2m - vesting from Escrowed GMX rewards
2m- floor price fund
1m - marketing, partnerships and community developers
250k - distributed to contributors linearly over 2 years
Any further tokens would only be minted if more products are launched, and liquidity mining is required. This would only happen via governance vote. It is a pretty unique grassroots project with no VC investors or associated unlocks.
8 for locked up funds.
Use case
GMX has a strong use case built around the following
Human desire for degenerate gambling
Decentralised trading experience (no KYC/ custody of funds)
Real yield paid to stakers
The value of decentralised exchanges like GMX was further strengthened after the collapse of FTX and various other centralised entities (Celsius, 3AC, Voyager etc.) According to defillama- TVL (incl staking) is just under $1 billion dollars. Pretty impressive.
You can also see that trading volume is strong (green bars) and daily active users (purple line) is in a strong uptrend. Keep in mind most of this growth was in a pretty brutal bear market (2022).
9 for use case.
Roadmap
There are a couple of exciting updates that the team are working on to improve the product and UX by providing a greater range of trading options. There are no defined released dates, but the team plans to ship in this order.
Synthetic PVP market making liquidity product
X4- Protocol controlled AMM
Deploying on new chains
Synthetics will be deployed first as they expect this to have a faster adoption rate. Medium article linked below.
https://medium.com/@gmx.io/gmx-update-3-33341d13571d
8 for Roadmap.
Team & funding
The first iteration of GMX was launched by the pseudonymous team in 2020- GMX’s V1 (XVIX). Followed by V2 Gambit in 2021. Around 45% of tokens (6m) were then distributed to investors of XVIX and Gambit for migrating to GMX at launch in June 2021.
The project is quite unique as it doesn’t have any VC investors and was launched as a grassroots community led project. Arthur Hayes is one of the biggest whales and holders of GMX. Check out @ThorHartvigsen thread analysing other well known whale wallets.
One of GMXs key successes has been to develop a strong community. There is a whole thriving ecosystem built around GMX and GLP. Check out @TheDeFinvestor s thread below outlining the ecosystem.
Some notable projects include
@GMDprotocol
8.5 for Team & funding.
Summary
TLDR summary for each category’s score out of 10.
9 - Revenue – Real yield distributed to stakers
7.5 - Treasury– $3m in the floor price fund
9 - Tokenomics – Incentivises staking & long-term sustainability
8 - Locked up funds – 65% tokens in circulation
9 - Use case – Decentralised trading, real yield
8 - Road map – Synthetics & X4 AMMs
8.5 - Team/ funding – Grassroots, community led
TOTAL- 8.8 weighted avg. score.
This is the highest score yet out of my deep dive series!! GMX have developed a great product with good tokenomics that incentivise long term sustainability of the project. There is great community engagement and I expect big things from this project.
The purpose of this thread is for education and research, not investment or financial advice. The current macro conditions are still very choppy with the risk of recession in 2023 and a tightening Fed so please be cautious out there frens.
Tagging some blueberries and good friends to get your thoughts on the thread. Please give them all a follow.
Appendix- useful links