GMX Referral Code: milk for 10% Off Fees

GMX is a decentralized perpetual exchange. Wait, a what? Okay, let’s break that down.

You already know what an exchange is: You can exchange one crypto for another, hence the super clever name. A decentralized exchange just means the exchange is run by smart contracts, computer programs that run on the blockchain. There’s no company mucking things up, and you can usually access the exchange from anywhere in the world. Pretty cool.

So, what’s this perpetual thing? Well, that part refers to futures trading, meaning a bet on the price of an asset at some point in the future. In the traditional finance world, futures usually require you to take delivery of the asset when the futures contract expires. In this case, you’re not betting on the price of pork bellies or oil. (What does one do with 4,000 pork bellies anyway?) It’s all about the crypto.

Even better: Perpetual contracts never expire, so you never have to take ownership of whatever weird crypto stuff you’re trading. You’re not buying the farm, you’re just, umm, betting it. Will the price reach X? Maybe. You can bet either way, up or down.

Lastly, GMX offers leverage trading, meaning you can bet more money than you have, multiplying your gains or losses. Put your crash helmets on, folks. The last time I tried this, I lost $200 faster than a cheetah chasing dinner.

GMX is popular as a perpetual exchange but also as a way to earn kick-a** yields that come from user fees — which might be even more interesting than trading with up to 50x leverage. I’ll cover both parts of the platform in this review. Let’s dig into the juicy details.

• Futures trading with up to 50x leverage: Bet on the future price of Bitcoin, Ethereum, and other assets. Using leverage, you can multiply your earnings — and your losses too!
• Trade on the cheap: GMX supports the Arbitrum and Avalanche networks, both of which bring much lower network fees compared to Ethereum.
• Own your own casino: Well, part of one, anyway. The GLP and GMX tokens both earn a yield from fees paid by traders on the platform. You don’t have to trade to make money on GMX.

The first step to using GMX.io is getting set up.

You’ll need a capable crypto wallet like MetaMask and some ETH or Ethereum-compatible tokens like DAI or USDC. Stablecoins like USDC make a good choice because the price won’t change.

Note: GMX only supports a handful of cryptos for trading.

I chose Arbitrum because the network supports native ETH. You can also use Avalanche. The Ethereum network isn’t supported, though. Good. Fees are lower on Layer 2 networks.

Now, to get ETH to Abritrum, we can do this the easy way or the hard way. Here’s the easy way:  I bought ETH on an exchange and sent the ETH from the exchange to my MetaMask wallet using the Arbitrum network. Coinbase and Binance both support this method. Super cheap way to go; the whole process costs pennies. Just check the dropdown menu on the transfer screen and select Arbitrum.

But if you have ETH on the Ethereum network that you want to use, you can use a crypto bridge (not hard, but more steps and sometimes costlier).

Basic Swaps

I mentioned that GMX only supports a handful of cryptos. Here’s the list:

Swaps happen from the blue trade button. My ETH to USDC swap went off without a hitch, although the fees were a bit higher than the quote below. I paid 32 cents per MetaMask. (Hey, big spender.)

Swaps work like trading pairs on a traditional exchange. Trade this for that.

If you’re buying crypto for leveraged trades on GMX, consider using USDC or DAI, both of which are pegged at a dollar. USDC and other stablecoins are good holding-pattern tokens because the price won’t jump around like a sugar-addled kid on a pogo stick.

Swaps work fine on GMX and are made possible by other GMX users who deposit tokens into the GLP liquidity pool, earning a yield for doing so. But the selection is pretty small compared to more diverse exchanges like Uniswap. That said, most people come to GMX for different reasons: leverage trading and yields. I’ll tell you about both in a bit.

GMX users aren’t the only folks making swaps on GMX. Liquidity pool aggregators like 1inch also use it. Aggregators help traders find the best exchange rates, which means more fees for the platform. Currently, the pool has nearly $500 million in assets concentrated in a handful of cryptocurrencies.

With liquidity pools, you’ll often pay more as you swap more from the same pool, causing a pricing mismatch called slippage. It’s a mechanism designed to keep the pool supply balanced. With larger pools — or positively massive pools like GLP — slippage isn’t a problem. Well done, GMX.

Leveraged Trades on GMX

Whoever coined the phrase "crypto casino" hadn’t seen anything yet. How about 50x leveraged bets on the price of Bitcoin or Ethereum? You can do it on GMX. You probably shouldn’t, but you can.

Leveraged trades work thusly: You can trade long, meaning you think the price will go up. Or, you can trade short, meaning you think the price will go down. And you can trade with more money than you have. For example, if you have a 20x long on Bitcoin, $1,000 lets you trade $20,000 worth of Bitcoin. Powerful stuff.

But you need to have enough margin to secure the trade. Margin works like collateral.

Let’s say Bitcoin goes up by 10%. You’re really making 200% because you’re using 20x leverage. Here’s the other side of the equation. If Bitcoin goes down by just 5%, you’ll lose your margin with the same 20x trade. The exchange can liquidate (sell) your remaining margin to cover the bad bet.

Yeah, you can lose your entire investment — and it can happen quicker than you can pop the top on a bottle of champagne to celebrate your ingenious trading strategy.

I took one for the team and made some small leverage trades on GMX. Nothing too crazy. Just 5x leverage on an ETH short and another 5x BTC short. (It was a down day in the market.) I like both cryptos, but that’s not the point of leveraged trading. It’s just a bet on price. GMX uses Chainlink (LINK) oracles, programs that bring in information from the outside world, to update the trading price in real-time.

GMX makes futures trading easy, and every long or short trade uses leverage. You can start at just 1.10x or move the slider anywhere up to 50x (you crazy nut, you). GMX then tells you if you have enough collateral based on the amount you want to trade. You might need to step down the trade amount or the leverage amount. The minimum trade amount is just $10, so if you want to go long on Bitcoin for $100 at 10x, you’ll need 10 bucks to start.

You can also fine-tune your trades.

• Market orders let you go long or short at the current price based on open limit orders.
• Limit orders let you go long or short at a price you define (but they might not ever find a match).

After I opened my positions, I set up triggers. These let you close out the position when your trade reaches a certain price and solve the problem of having to babysit your trade. You can close out part of your position or the whole thing. I set up a trigger to take profit by closing out half the trade and letting the rest ride. This strategy is like doubling your money in Vegas. Just pocket the money you bet in the first place and then play with the house’s money.

• Stop-loss triggers close all or part of your position if you’re losing money on the trade. This saves some of your capital for your next brilliant trading idea.
• Take-profit triggers close out all or part of your position if you’re making money (and want to keep it). Nobody ever went broke taking a profit.

GMX isn’t unique in this regard. Other platforms like dYdX offer leverage trading with triggers as well. The downside: You can’t access dYdX from the US (and using a VPN — so you can try to trick the platform into thinking you're not in the US — is against their terms and conditions).

GMX also offers fewer trading pairs for leveraged trades compared to dYdX. The good news is that I can’t lose $200 shorting Dogecoin like I did on another platform. Thankfully, there’s no way to trade doggie coins on GMX.

GMX leverage trading pairs:

That’s it, folks, just four. By comparison, dYdX offers 37 cryptos for trading. To be fair, most of the action is in ETH and BTC futures anyway.

In a recent broadcast, the GMX team hinted at a possible expansion of trading pairs and possibly even some synthetic assets, which would let users trade perpetual futures for commodities.

Fees are relatively low on GMX because you’re using Arbitrum or Avalanche rather than Ethereum — but there are a lot of them, so you want to plan your moves carefully.

Open or close a trade, pay a fee. Swap tokens, pay a fee. Set a trigger, pay a fee. Stake some GMX, pay a fee. You’ll need some spare ETH on hand to pay for this fee frenzy or some AVAX if you’re using GMX on Avalanche.

If you only have ETH but want to open a Bitcoin position, GMX will swap your tokens as part of the trade because BTC is required as collateral for BTC positions. Makes sense. You’ll pay a fee for this as well.

By comparison, dYdX is still more affordable if you’re a casual trader because you can trade up to $100,000 per month without paying any fees at all — except a network fee when you deposit crypto on the platform.

• Swap fee: Variable based on demand
• Trading fee: 0.1% of your position size
• Borrowing fee: Variable based on demand

With leverage trading, you’re borrowing. GMX calculates the fee hourly based on the amount you borrow relative to the total amount of that asset in the pool. Cryptos with higher borrowing demand cost more to carry in a leveraged trade. And there’s no way to trade perpetuals without leverage on GMX (minimum 1.10x), so you’ll always have carrying costs. Borrowing fees nibble away at your margin over time, taking a little bite each hour.

None of GMX’s fees are hidden, but I did have to hover over some links to get the details. Be careful: It’s easy for a trade to cost more than you realize.

Staking GLP And GMX

In the casino world, the entire industry runs on odds, meaning you might win, but over time the house has a statistical advantage. The same is true for GMX, at least so far.

Here’s the chart since GMX launched. Green on the right is cumulative winnings, and red is cumulative losses. Red is bigger, and the long-term trend has been steady since the early days of GMX.

To me, this was the most interesting aspect of GMX: You can own part of the winnings and collect part of the fees (not reflected in the chart above).

GMX passes fees to token holders or stakers through two tokens.

• GMX: The GMX token is a governance token you can use to vote on future changes to the protocol. Staked GMX earns 30% of the fees collected by the platform.
• GLP: The GLP token is the liquidity pool token for GMX. When you buy the GLP token, you’re really funding the liquidity pool used for leverage trades and swaps. In exchange, you’re minting GLP tokens that earn 70% of the fees collected on the platform. And your rewards are paid out in ETH (or AVAX if you’re using Avalanche).

GLP tokens are backed by the total assets in the pool and the cumulative earnings from trades. This means that as asset values fall and rise, the token value changes. The same is true for cumulative earnings for the platform. If traders go on a winning streak, the token value falls. But, historically speaking, the house wins.

Basically, your GLP tokens represent your share of GMX’s profits and losses from trades. If traders make a profit, it’s paid from the GLP pool. If they lose money, the pool gets the money from those losses. But the biggest part of the pool’s half-billion dollar value is the tokens investors put into the pool to mint the GLP token. Owning GLP means owning a basket of top cryptos, with about half of the mix in stablecoins pegged at $1.

You don’t have to stake anything to earn a yield on GLP. You just have to provide liquidity by buying GLP tokens on GMX with ETH, USDC, or another supported token. But GLP tokens don’t trade anywhere else. You won’t find them on Uniswap or Coinbase.

I learned my leverage trading lesson with the spanking I took last time, so I bought some GLP rather than doing more trading. Currently, the yield for GLP is over 20%, paid in ETH.

GLP Yields:

But unlike the magical mystery money tokens you’ll find on some other decentralized finance (DeFi) platforms, it’s easy to understand where the yield comes from on GLP. It comes from traders like me who lose money trading with leverage and from all the fees we pay along the way, thinking it might end differently this time. Hope springs eternal — and that (perhaps misplaced) hope means profit for perpetual exchanges like GMX.

Until recently, GLP paid additional rewards in Escrowed GMX (esGMX). Escrowed GMX can’t be sold right away, but it can be staked just like GMX to earn nearly a 7% yield. The GMX token still pays a small yield in esGMX, but these extra rewards are being phased out following a vote by token holders.

GMX Yields:

The GMX token is also available on Uninswap and other liquidity pools. Just click on “Buy” in the top menu, and GMX will show you where you can buy some GMX tokens. Then, come back to GMX and click on “Earn” to stake your tokens.

Escrowed GMX, while a smaller part of the big picture, is a long-term play. You can’t sell it until it comes out of escrow, which happens at a rate of 1/365th per day. Yep, it’ll take a year to get it all. Freeing esGMX from its crypto purgatory requires an extra step as well. You have to place it in a vault for vesting.

If you believe in the future of GMX, the GLP and GMX tokens deserve a closer look. Just be aware that if you wake up one day and GMX is gone, your tokens are worthless. The good news is that the code for GMX has been audited by the same team that audited the Uniswap Version 3 code.

If you’re a buy-and-hold Bitcoin-only investor, GMX isn’t for you. But GMX can be great for other traders.

• People who want to trade with leverage. Centralized exchanges in the US don’t really do the leverage thing. Kraken offers leveraged trades, but only up to 5x, and you have to prove you own a mansion and a yacht to qualify. GMX makes leverage trading available to everyone.
• People who want to earn a yield they actually understand. Through the GLP and GMX tokens, you can earn solid yields of over 20% and about 7%, respectively. Better yet, it’s easy to understand where the yields come from (traders on the platform). And there are plenty of stats to back it up.
• People who want to diversify their crypto holdings. About half of the liquidity pool tied to the GLP token is stablecoins pegged at $1. Those values won’t change. The other half is made up of market-leading cryptos like Bitcoin and Ethereum. The GLP token gives you exposure to a “relatively safe” portfolio of assets while also paying that sweet yield mentioned earlier. It’s like a blue-chip crypto mutual fund — but with better yields. Just know that you’re the casino owner, and if the casino loses money, you lose money.

• People who don’t want risk. Crypto is risky no matter how much padding you wear, but GMX brings some new and more exciting risks. Leverage trading is like the bungee jumping of crypto. Sooner or later, your luck might run out. Even token staking is risky. If GMX pulls a disappearing act, kiss your tokens goodbye.
• People who want a large section of tokens. The leverage trading selection on GMX is a bit light. You’re limited to just four options, whether you use Arbitrum or Avalanche. If you want to long or short that new token you heard about on Twitter, you won’t find it on GMX.

dYdX is the closest alternative to GMX and offers leverage trading for 37 different cryptocurrencies. The platform has decentralization on its roadmap but hasn’t quite reached that destination yet. That means there are still people in the middle of transactions or making decisions for the platform. However, dYdX has one particularly appealing feature: There are no fees on the first $100,000 of trading activity each month.

GMX.io vs. dYdX

BTSE is another option if you prefer a centralized exchange, and it offers the widest selection in this group, with 50+ choices for futures trading. BTSE is a full exchange, so you can also make spot trades where you buy Bitcoin or other cryptocurrencies rather than just trading futures. The BTSE exchange is headquartered in Dubai and does not require identity verification unless you deposit fiat money, like USD.

GMX.io vs. BTSE

Transparency is key when you choose a DeFi platform, and GMX lays it all bare. You can find pretty much any stats or other information you want — except who created the thing. But whoever that was, they built an intuitive trading platform with a way for stakers to take the other side of the trade and a share of the profit. Our only wish: Add a few more tokens for leveraged positions, please. Sounds like that’s on the way as well.

Find More Crypto Exchange Referral Codes

• OKX Referral Code
• Bybit Referral Code
• Crypto.com Referral Code

• How much is 1 GMX in USD?

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  Currently, GMX trades at $68.25. You can get GMX on Uniswap or 1inch, a decentralized exchange aggregator that helps you find the best price among several sources.

• How do I buy GMX.io?

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  Uniswap is one popular way to get GMX tokens. You can get GLP, the other token for GMX, by depositing ETH or another supported crypto into the GMX liquidity pool to mint GLP tokens.

• Is GMX.io safe?

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  Leverage trading is always risky, but you can make it safer by trading smaller amounts or using less leverage. For example, a 5x trade gives you much more room for error compared to a 20x trade. In any kind of trading, only trade amounts you can afford to lose. Don’t bet the mortgage money because you can lose it all in seconds. Lucy, you got some 'splainin' to do!