Jonathan Hobbs

4 months ago1 min

This Token Climbed 90% Last Year. It Could Be For Good Reason.

This Token Climbed 90% Last Year. It Could Be For Good Reason.

Jonathan Hobbs

4 months ago1 min

This Token Climbed 90% Last Year. It Could Be For Good Reason.

Most crypto projects got the wind knocked out of them last year, but not decentralized crypto exchange GMX. Its token, which is also called GMX, finished the year up 90%. This chart from Token Terminal might help explain why.

See, GMX allows users to trade different tokens on the Avalanche blockchain or on Arbitrum – a scaling solution to Ethereum. But unlike most other decentralized exchanges (DEXs), GMX can also be used to trade crypto futures – leveraged derivatives products that track the price of a digital asset. Just like a centralized crypto exchange, GMX generates trading and other types of fees from its users. And as the chart shows, those fees (green bars) have been flowing in steadily since late 2021.

It’s collected $113 million in fees over the past 365 days – far less than the $710 million raked in over the same period by the biggest DEX, Uniswap. But the story’s a bit different when you compare apples to apples: Uniswap has a fully diluted market cap of around $6.6 billion (that’s the total market cap of the project once all its tokens are released into circulation), while GMX’s is just $760 million. So if you’re looking for relative value, GMX has a market-value-to-fees ratio of about 6.7 times compared to Uniswaps’ 9.3.

GMX’s price (purple line) is no stranger to volatility, and its been running into strong price resistance around the $60 mark (white rectangle). It tried to break through that level three times last year – and again on Sunday – and failed each time. But, hey, the more times you knock on the door, the more likely it is that someone will eventually let you in…

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Learn More

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.