Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
While centralized crypto institutions such as FTX and Celsius experienced a nuclear meltdown in 2022, GMX’s decentralized leverage perpetuals exchange established itself as the true white knight of crypto--a DeFi trading alternative with larger volumes to compete with centralized exchanges (CEXs). GMX powered as much as $1B in daily trade volume on its best days in 2022. As a result, GMX user community grew from a few hundred unique users to an estimated 192k new users according to their GMX Stats dashboard. Even the GMX token would stand out as an outlier in performance during the worst part of the crypto bear market, gain 86% in the same year BTC would drop 62% and ETH 68%.
Despite all this success, GMX V1 had a number of shortcomings that would be addressed in their newest V2 release including:
- Zero price impact allowed large traders to maintain their capital in GMX V1 for extended periods, which consumed trading capacity and led to imbalances in open balances.
- GLP as a composable building block was difficult to develop higher-level financial strategies on top of and presented friction to adding new assets for trading on GMX.
- In general, fees were significantly higher which prevented more trading activity and a lesser UX.
- The inability to long/short a market with the same collateral presented challenges to GMX V1 traders.
- Technological limits that limited trade volume such as slower execution speed and a clunky UX missing features found on CEXs such as the ability to customize orders with TP