<h2 id="header-0">1. Introduction</h2>On the GMX exchange – accessible via <a href="https://app.gmx.io/#/trade/?ref&#61;earn" rel="noopener noreferrer nofollow">gmx.io</a> – you can trade BTC, ETH, and other top cryptocurrencies with up to 50x leverage directly from your self-controlled crypto wallet.As a trader, the absence of price impact on GMX ensures that you receive an optimal entry. If you’re looking for yield opportunities, you can lend your crypto to the protocol’s liquidity pools in return for substantial fees.All you need is an Ethereum-compatible wallet like Metamask, Coinbase Wallet, or any other self-custodial wallet that supports WalletConnect.Experience the decentralized exchange’s friendly user experience for yourself, via the intuitive interface at: <a href="https://app.gmx.io/#/trade/?ref&#61;earn" rel="noopener noreferrer nofollow">app.gmx.io/#/trade</a>The GMX exchange is live on the Arbitrum One and Avalanche blockchains. Pick your preferred network, and <a href="https://app.gmx.io/#/buy" rel="noopener noreferrer nofollow">bridge some funds to trade</a>! This only takes a few minutes.<h2 id="header-1">2. What is GMX?</h2>GMX is a decentralized exchange protocol (DEX) — a DeFi application deployed on a blockchain network. Centralized exchanges have traditionally been the backbone of the cryptocurrency market, but DEXes are increasingly gaining market share.GMX’s decentralized perpetual exchange first launched on the Arbitrum One blockchain, when the network went live in September 2021. Arbitrum is the leading Ethereum layer-2 Rollup, a solution designed to boost the speed and scalability of Ethereum smart contracts.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/31466250a4494f0babc6443d59c923cf.png" />The deployment of GMX on Avalanche — a high-speed, low-cost, and EVM-compatible blockchain — followed in January 2022.The presence of many other reputable DeFi teams on Arbitrum and Avalanche has been a big advantage. It allows GMX to cooperate with these builders to develop products on top of the GMX protocol’s composable ‘lego blocks’ — the trading system and GLP liquidity pool.In total, more than 287,000 users have already traded on GMX, together realizing 131 billion USD in trading volume!Tip: to add the Arbitrum and Avalanche networks to your personal wallet with a single click, you can visit the useful resource <a href="https://chainlist.org/" rel="noopener noreferrer nofollow">Chainlist</a>.<h2 id="header-2">3. How Does It Work?</h2>On GMX’s decentralized exchange, trading is facilitated by a unique multi-asset pool called GLP. Anyone can supply their crypto to this liquidity pool in exchange for fees. The traders use the assets provided to the GLP pool to leverage trade and swap on the DEX.Are you interested in trading with leverage on-chain? GMX enables you to do spot swaps and trade perpetual futures up to 50x, similar to how Binance allows users to swap tokens or trade tokens with leverage. However, contrary to using a centralized exchange, you retain custody of your assets — they stay in your own wallet.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/b2deb5a290de49e69573c546162a877c.jpg" />Trading positions are opened through an intuitive swap interface, and with zero price impact. This means that your order size does not create price slippage, contrary to an order book-based exchange.The protocol’s V1 liquidity pool is called GLP, for GMX Liquidity Provider token. When you provide liquidity by minting GLP, you take a directional bet on the cryptocurrency market. But your risk is lowered, as half the assets in the index are stablecoins. Meanwhile, you earn an attractive yield.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/129896fa37da48e9a4d401c60accb615.png" />The GLP pool, as a whole, is the counterparty to the traders on the GMX exchange. As GLP token holders provide the liquidity used for leverage trading, they profit when traders lose — and vice versa.<h2 id="header-3">4. What is the GMX Token?</h2>The GMX token is a utility and governance token. Token holders vote on proposals to help decide the exchange’s future direction. You can also stake your GMX in return for two types of rewards:<ul><li>Protocol fee rewards (in ETH or AVAX)</li><li>Multiplier points</li></ul>30% of all protocol fees generated by the GMX exchange are distributed to staked GMX tokens. Additionally, stakers earn Multiplier Points that boost their yield. Multiplier Points reward long-term holders without contributing to token inflation. These dual incentives stimulate commitment to GMX and further the platform’s decentralized ownership.The GMX token has a maximum supply of 13.25 million, with a circulating supply of  8.72 million (reference date: May 2023). Close to 78% of the circulating supply is currently staked.<h2 id="header-4">5. What Makes GMX Unique?</h2>GMX is growing rapidly, by bringing the simplicity of perpetual futures to on-chain leverage trading. Liquidity on the DEX is sticky. Plus, there is a strong sense of community around the ‘blueberry’ token.<h3 id="strong-the-trading-system-strong">The Trading System:</h3>Allowing traders to open a leveraged position through a simple swap interface reduces barriers to adoption. However, other fundamental factors help set the GMX exchange apart.Compared to centralized exchanges, GMX is self-custodial and trustless. You trade your tokens straight from your private wallet —  a significant distinction.Version 1 of the GMX protocol allows you to enter and exit your trading position with no price impact, resulting in cost savings. This rare design choice ensures a better entry price than order book-based exchanges, where traders suffer from price slippage.The exchange uses an aggregate of <a href="https://chain.link/" rel="noopener noreferrer nofollow">Chainlink Oracles</a> and other high-quality price feeds to smooth out price fluctuations. This keeps your position safe from temporary liquidation wicks.Both spot swaps and leveraged trading are supported. This dual model improves capital efficiency, as the assets in the GLP pool have high utilization. User deposits generate extra yield and don’t sit idle.Furthermore, GMX offers traders notably deep liquidity. The GLP pool on Arbitrum, with around $500 million in user deposits, allows a ‘whale’ to take a $10 million USD position with virtually no slippage — a unique opportunity.<h3 id="strong-the-ecosystem-strong">The Ecosystem:</h3>Aside from these distinctive technical features, GMX has successfully cultivated a growing ecosystem.GMX has tried to foster the DeFi mindset of engagement and tool-building amongst its users. Community-built tools include a Telegram positions bot, the <a href="https://www.gmx.house/" rel="noopener noreferrer nofollow">gmx.house Leaderboard</a>, the gmxstats.com page, <a href="https://dune.com/browse/dashboards?q&#61;gmx" rel="noopener noreferrer nofollow">Dune Analytics Dashboards</a>, and a suite of calculators that benefit traders, stakers, and liquidity providers.The list of collaborative projects building added functionality with GMX’s composable DeFi lego blocks is constantly growing, see: <a href="https://app.gmx.io/#/ecosystem" rel="noopener noreferrer nofollow">https://app.gmx.io/#/ecosystem</a>.Tellingly, the community has also taken communication into its own hands. <a href="https://blueberrypulse.substack.com/" rel="noopener noreferrer nofollow">The Blueberry Pulse</a> has emerged, a weekly newsletter that highlights developments in the GMX ecosystem. And there is a <a href="https://mobile.twitter.com/theberrypodcast" rel="noopener noreferrer nofollow">Blueberry Podcast</a>, which does the same in a talk radio format.Why all this talk of blueberries, you may wonder? That fruity meme was started by the <a href="https://blueberry.club/" rel="noopener noreferrer nofollow">GMX Blueberry Club</a>: a customizable NFT collection on Arbitrum. The GBC Club is also building additional functionality on top of GMX, like Mirror Trading (social trading).<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/e7867bfabda446109d5fb5730306c184.png" /><h2 id="header-5">6. How to use GMX</h2><h3 id="strong-trading-strong">Trading:</h3><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/5b443f3280734a439d74561f799e788d.jpg" />GMX’s trading interface displays alongside the price chart. To start a leveraged trade, you click on &#34;Long&#34; or &#34;Short&#34; to set your bias. A Long earns a profit if the token&#39;s price goes up, and vice versa.The first token is the collateral you supply, while the token below is the asset you trade. The leverage slider indicates how much you borrow from the GLP pool. Limit orders, as well as take profit and stop loss orders, are available.After opening a trade, it will appear under ‘Positions’. You can click on ‘Edit’ to deposit or withdraw collateral. For detailed instructions, visit: <a href="https://gmxio.gitbook.io/gmx/trading" rel="noopener noreferrer nofollow">https://gmxio.gitbook.io/gmx/trading</a>Opening and closing a leveraged trade costs a fee of 0.1 percent of your position size. Traders also pay a utilization-dependent hourly borrowing fee.Simple, low-fee spot swaps are also available on GMX. Click on <a href="https://app.gmx.io/#/trade" rel="noopener noreferrer nofollow">the &#34;Swap&#34; tab</a> to open the interface to swap between the tokens in the GLP pool.<h3 id="strong-providing-liquidity-strong">Providing Liquidity:</h3>GMX V1 uses a liquidity pool called GLP to enable users to trade with leverage. GLP can be seen as a crypto ‘index fund’: the pool consists of 50-55% stablecoins, 25% ETH, 20% BTC, and 5-10% other altcoins (AVAX, or LINK &amp; UNI).<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/ef2f2514b9ba47ec8b11a6e29665cede.jpg" />In exchange for minting GLP, you earn 70% of all fees generated on that particular blockchain. Contrary to Uniswap’s liquidity pools, GLP also suffers no ‘Impermanent Loss.’The GLP token can be minted using any of its index assets, and burnt to redeem any index asset. Unlike the GMX token, it is automatically staked and not transferable. GLP&#39;s price, rewards, and index composition differ between Arbitrum and Avalanche. You can see the composition of the GLP pool on Arbitrum here:<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/b921e4cc7f2b4bce94dbff2109ff05ae.png" /><h3 id="strong-staking-strong">Staking:</h3>To stake your GMX tokens and earn rewards, visit:<a href="https://app.gmx.io/#/earn" rel="noopener noreferrer nofollow"> https://app.gmx.io/#/earn</a>. Connect your wallet, and press the ‘Stake’ button:<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/85b3c99ffedb441992de5881c608a011.png" />Have you confirmed the transaction on-chain in your wallet? Great! You will now earn 30% of all GMX’s protocol fees (received in ETH or AVAX), plus Multiplier Points incentives.The dApp interface clearly shows how your types of rewards increase under ‘Total Rewards’. Click the ‘Compound’ button to stake your accrued rewards and compound your yield.Have a question? Visit the <a href="https://t.me/GMX_IO" rel="noopener noreferrer nofollow">GMX Telegram</a> or <a href="https://discord.gg/cxjZYR4gQK" rel="noopener noreferrer nofollow">Discord</a>; you will find a helpful community waiting there for you!<h2 id="header-6">7. What’s next for GMX</h2>The GMX DAO has laid out a clear roadmap for the future through the governance process. It expands on the vision of GMX as the most comprehensive and user-friendly DEX for on-chain leverage trading:<ol><li>With GMX V2, synthetic markets will become available on the exchange. Synthetic crypto assets derive their value from any underlying asset — on or off the blockchain. They are essentially digital representations of derivatives. The <a href="https://github.com/gmx-io/gmx-synthetics" rel="noopener noreferrer nofollow">smart contracts for this next iteration of the GMX protocol</a> are currently on testnet, and will soon be live!</li><li>Additional UI and UX refinements will be added step-by-step, on a constant basis.</li><li>‘X4, Protocol Controlled Exchange’ and GMX Swap. A future-oriented vision of GMX as an advanced Automated Market Maker that allows other DeFi projects to build on top of its liquidity pools, and customize the functions of their pool entirely.</li><li>And, finally, additional blockchain deployments: rolling out the GMX exchange on a third network alongside Arbitrum and Avalanche.</li></ol><h2 id="header-7">8. Closing thoughts</h2>GMX seems to be finding Product-Market Fit, by balancing the needs and wants of all DEX stakeholders well. Traders benefit from cost-savings and deep liquidity; Liquidity Providers benefit from high capital efficiency and yield, and Stakers benefit from increasing protocol adoption.Above all, the decentralized exchange works intuitively. And users can have faith that it keeps getting better, step by step.Try it out for yourself, with a discount on your trading fees: <a href="https://app.gmx.io/#/trade/" rel="noopener noreferrer nofollow">app.gmx.io/#/trade/</a>

How to start trading on the GMX exchange

Table of Contents

GMX

Other articles published on May 23, 2023

Bitcoin Oracle AI review: comparison with competitors like Biticodes and Bitcoin 360 AI

MEXC Global Launches FLUUS Kickstarter Listing Campaign with Airdrop Rewards

IoTeX Partners with Alchemy Pay to Revolutionize Blockchain Payments and Remittance Solutions

HODL Team Weekly Update: (May 15 – May 21)

$PUMLx staking unlocking on KuCoin soon! Earn up to 80% APY

MongsNFT Holders can Claim $MONG Tokens Now!

Join our free newsletter for daily crypto updates!