It's all about the GMX V2

Trading market

 

  In GMX V2, each transaction pair has a corresponding LP. For example, for ETH/USD transactions, LP also consists of ETH/USDs. The long collateral is ETH, the short collateral is stablecoin, and the index token is ETH.

In this case, the security advantage brought by the full mortgage is still retained, and each LP of the transaction pair only needs to bear the risk of this transaction pair, which is conducive to the listing of more assets and opens the possibility of allowing the up-coin without permission in the future. After all, unlike GLP, the last new coin needs to consider the impact on the whole pool.

In addition, synthetic assets are assets that can also be traded off the chain. For example, in SOL/USD market, LP is ETH/USD, long collateral is ETH, short collateral is stablecoin, and index token is SOL. This means that ETH supports long trades in SOL.

Obviously, the security of SOL/ USD cannot achieve the full guarantee effect of ETH/USD, but considering the correlation of SOL/ETH, compared with pure USD as LP, the risk will be much smaller. GMX also said it would limit OI to less than collateral assets to reduce risk.

费用结构

  In addition to the basic transaction fee. GMX V2 has three fees: Funding Fee, Borrow Fee and Price Impact. These fees help balance long/short LP and OI, avoid inefficient use of capacity and reduce the risk of price manipulation, generally making GMX LP less risky and leading to higher volumes.

Funding FeeThe main purpose is to balance the long and short. The specific formula is: (X) * (difference between long and short OI) ^ (Y)/(sum of long and short OI). X and Y are both configurable parameters. In OI, the bulls pay a fee to the bears, and vice versa

Borrow FeeThe main purpose is to reduce the inefficient occupancy of transaction capacity. Because the trading capacity of GMX is affected by the pool size, it is a finite resource. In V2, the borrow fee is also determined by the ratio of OI to pool capacity.

Borrowing fees are calculated as borrowing factor * (open interest in usd + pending pnl) ^ (borrowing exponent factor) / (pool usd) for longs and borrowing factor * (open interest in usd) ^ (borrowing exponent factor) / (pool usd) for shorts.

Price Impact has a threefold effect

1. Balance of excitation LP pool  

2. Incentive balance of long and short Positions  

3. Reduce the risk of price manipulation

So how do you do that? Well, the short answer is for LP access, if your deposits make the pool more unbalanced, you have to pay, and more balanced you have to make a profit. For the switch position, it is to consider the impact on the long/short balance.

(initial USD difference) ^ (price impact exponent) * (price impact factor / 2) - (next USD difference) ^ (price impact exponent) * (price impact factor / 2)

其他改进

  Due to the more scientific Price Impact to check and balance, the spot exchange rate is greatly reduced in the V2 parameter setting proposal, the exchange rate of unstable coins to base is only 0.05%, stablecoin even as low as 0.01%. That would give GMX a chance to grab a bigger slice of spot trading.

In addition, in terms of trading experience, V2 also optimizes the mechanism of limit order and stop loss order, and supports spot limit order.

横向对比 GNS

  GNS also has three kinds of expenses: Funding Fee, Rollover Fee, Spread(Price Impact). Except that the Funding Fee is consistent, the other two expenses are quite different. For example, GNS's Price Impact is determined using CEX's deep data and trading position, and the Rollover Fee only applies to the collateral, while GMX Borrow Fee generally applies to the overall position. See the tweet below for details.

In addition, GNS uses a single gDAI as LP, GMX still uses the index asset model and uses independent liquidity, GNS still has more flexibility in terms of capital efficiency and on-line assets, while GMX goes further in risk control.

纵向对比 GMX V1

  Standalone pools provide better risk isolation than GLPS because GMX can cover more long-tail assets (small currencies) when synthetic assets come online. But these assets carry a lot of risk, and the Avax deal was attacked in the past, so risk isolation is necessary to prevent GMX as a whole from being dragged down if something happens. In addition, currently, the ratio of GLP currencies is centrally determined by the team /DAO, and after the launch of the independent liquidity pool, it is actually decided by the market, which is undoubtedly more efficient, and it can be expected that there will be no license on the currency.

The newly added Funding Fee and Price Impact will help the trading volume. GMX is actually more like a leveraged trading platform, the rate is one-way, the perpetual contract market is obviously larger, which is very conducive to GMX to attract more users. Price Impact can help balance the long-short ratio and reduce the risk of price manipulation, which helps to increase the trading capacity. Compared with only one Borrow Fee before, it is much better

The synthetic asset mode can support the addition of assets that are not on the chain, such as SOL/USD in the above example. But consideration still requires the existence of multiple collateral, and the collateral also needs to have a certain relationship with the asset to qualify. So this is not expected to quickly put on the GNS can be those stocks, foreign exchange what are on. Although in theory, you can use U for long collateral.

总结

  In short, GMX V2 gives GMX less risk, more trading capacity, and the ability to trade more assets.