GMX Generates More Fees than BNB Smart Chain and Bitcoin

Dalmas Ngetich

2 years ago

3 mins read

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GMX, the perpetual trading decentralized exchange (DEX) allowing up to 50X leverage, now generates more trading fees than the BNB Smart Chain (BSC) and Bitcoin.

GMX Is The Third Most Active Platform

According to statistics, GMX’s 1-day fee on January 19 was around $589,000, while BSC and Bitcoin on-chain fees, over the same period, stood at $524,232 and $328,935, respectively.

GMX Crypto Fees — GMX Fees| Source: CryptoFees

Ethereum and Uniswap are the only two major protocols more active than the perpetual trading decentralized exchange, per the above data. During this time, the total Gas fees accrued in Ethereum exceeded $5 million. In Uniswap, it was over $2.1 million, roughly 4x GMX’s and BSC’s daily fees.

GMX supports trading various coins, including BTC, ETH, and AVAX. As of writing, GMX had $96,802,651,673 in total trading volume with open interest, that is, the number of opened positions, long and short, of $207,102,720. Meanwhile, over 208,000 active traders were using the platform to trade on Arbitrum and Avalanche. GMX launched on Arbitrum and Avalanche, considering their scalability and low fees versus Ethereum.

Arbitrum is Ethereum’s layer-2 platform permitting scalable and low-fee trading fees. On the other hand, Avalanche is scalable and boasts the fastest settlement time in crypto. By launching on these two platforms, GMX says it allows users to save on costs by entering and exiting positions with minimal spread and zero price impact.

Traders take the profits of selling positions in USDC and the quote token when they go long. GMX prices are based on Chainlink’s decentralized oracles to prevent price manipulations.

Trading Fees As A Measure Of Activity

Trading fees generated by a dApp or on a blockchain are a crucial activity indicator. Despite the tendency of users to opt for protocols offering near-zero fees, the decentralized nature of blockchains means validators or entities securing core infrastructures must be compensated.

In decentralized finance dApps like Uniswap and GMX, trading fees generated from swapping activities are distributed to liquidity providers (LPs). There are also governance tokens that are distributed. Anyone can be an LP.

In September 2020, Uniswap distributed UNI to users who had, in one way or another, used the protocol to swap tokens before the airdrop distributing date. Currently, UNI trades at $6.1.

Uniswap daily price — Uniswap Daily Chart | Source: UNIUSDT on OKX, TradingView

Interestingly for GMX, the 1-day trading fee of $589,000 posted on January 19 exceeds the total average amount accrued over the past trading week of $565,682. The same trend can be observed in the top-5 most active platforms. Making extensions on this could point to renewed interest from users and traders using the protocol in one way or another.

In GMX, it could mean more traders are posting traders, aiming to clip the market and turn in a profit. Coincidentally, the upswing in trading fees is recorded when the cryptocurrency market appears to be bottoming up after losses. At least, this was the trend in 2022.

Featured image from GMX, charts from TradingView.com

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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