GMX operates on the BSC, but after successfully deploying the product on Arbitrum, the project has fully transitioned its operations to Arbitrum. Additionally, with the distinction of being one of the first perpetual contract trading platforms on Arbitrum, GMX has gained a stable user base and expanded to Avalanche afterward. GMX is known for representing the Real Yield model in DeFi.
GMX has a unique operational model, as it doesn't employ an order-book system like dYdX, nor does it use AMM pools like Perpetual Protocol. GMX has its own liquidity pools, and prices are traded based on oracle prices. The AMM model with X*Y=K has a weakness in that it can experience price slippage for large trades.
In GMX's model, the protocol uses fast oracles from Chainlink to accurately predict asset prices from various trading venues, minimizing price slippage for large trades. Furthermore, when traders use leverage long/short positions on GMX, they are not subject to funding rate fees like on centralized exchanges. This is a feature that I like, as it saves traders a significant amount of fees, especially for long-term positions.
After experiencing DeFi 1.0, most traders realized that their profits in the DeFi space came from token incentives with hyperinflationary designs, and the utility of tokens was often limited to dumping. To survive during a downtrend, those who remained in the DeFi space sought something sustainable, low-risk and efficiently profitable. I believe this is a reason why Real Yield has garnered attention in DeFi. Show Less
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