Examining the Design and Traction of GMX's Hybrid DEX

NOV 19, 2021 • 13 Min Read

Duncan Reucassel

DISCLOSURE: DELPHI VENTURES IS INVESTED IN BTC AND ETH. MEMBERS OF OUR TEAM HOLD GMX, GLP, UNI, AND SNX. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.

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The DEX space is rife with innovative designs that enable efficient swaps across a multitude of assets. One of the newer additions to this space is GMX – a hybrid spot-derivatives DEX on Arbitrum and Binance Smart Chain. GMX specializes in spot swaps and leveraged trading via perpetuals. Traders can swap their tokens or enter perp positions with relatively low fees and zero slippage. The secret sauce behind the model is the protocol’s native index – GLP.

GLP is a floating basket of assets with target weights of 40% ETH, 30% BTC, 5% LINK, 5% UNI, 15% USDC, and 5% USDT. GLP acts as the liquidity source for all trades on GMX. Deposit and withdrawal fees for GLP adjust dynamically, helping the basket achieve its target weights per asset. Currently, GMX only supports six assets. In the future, more assets, and potentially other themed baskets, can be added. To understand how this works, let’s dive into GMX’s core design.

Spot swaps are structured like an OTC trade

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