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2023/07/31 04:25

dYdX vs. GMX – A Comparison of Two Established Dec

dYdX and GMX are among the leading decentralized exchanges (DEXs) in the market. They make it possible for crypto traders to trade with leverage. In this article, we will compare the two DEXs, in terms of their functionalities, features, and trading fees. Continue reading to find out which DEX meets your trading needs.

What’s GMX?

GMX is one of the few decentralized exchanges letting users trade both perpetual contracts and spot markets. Further, the DEX has a unique liquidity model. Instead of the common AMM model, it uses a GLP liquidity pool that allows users to purchase and stake the GLP liquidity token, which GMX Protocol issues. This enables users to be involved in market making.

GMX recently announced that it was planning to upgrade the DEX, which would see the introduction of more trading pairs, a new liquidity structure, and reduced trading fees. GMX has continued to witness massive growth amid the current bear market.

What’s dYdX?

dYdX was originally developed on Ethereum. However, the DEX has since expanded to various networks, including StarkEx and Cosmos. It is popular for facilitating the trading of perpetual contracts, offering 20x leverage. Along with processing transactions quickly, dYdX offers low trading fees, and its user interface makes the platform beginner-friendly.

Comparison Between dYdX and GMX

Trading Fees

GMX offers a trading fee of 0.1%. Moreover, users are required to pay a 0.33% swap fee. They are also charged when staking the protocol’s native token GMX. It is important to mention that the gas fees paid when making transactions on GMX are considerably low because the DEX uses Avalanche and Arbitrum.

On the other hand, dYdX does not charge trading fees for users with monthly trading volumes of less than $100,000. However, the DEX employs the taker-maker fee model for traders with 30-day trading volumes of over $100,000. The fees usually range between 0.020% and 0.50%.

Now let’s take a look at how margin trading on dYdX and GMX compares.

With GMX, traders can enjoy 50x leverage when trading perpetual contracts on a number of crypto assets, including Bitcoin, Ethereum, LINK, and Avalanche.

On the contrary, dYdX offers 20x leverage. However, it supported more leveraged pairs than GMX. They include DAI/USDC, DOGE/USDC, DYDX/USDT, ETH/BTC, BTC/USDT, ETH/DAI, and AGLD/USDT.

Governance Token

The two DEXs have their governance tokens. The GMX governance token, GMX, also serves as a utility token. Its maximum supply is capped at 13.2 million. As of July 2023, the circulating supply stands at 8.6 million.

All GMX holders are allowed to influence the direction of the DEX by voting on the raised proposals. They can also stake them to earn 30% of the collected trading fee.

On the other hand, dYdX’s governance token, which shares its name with the DEX, is an ERC-20 token. The crypto asset gives its holders a voice in the protocol’s governance. The dYdX token supply is capped at 1 billion, while circulating tokens are 151 million as of this writing.

Cross-Chain Support

The GMX decentralized exchange runs on two blockchains: Avalanche and Arbitrum. These networks enable the protocol to provide users with instant liquidity, a secure trading environment, and low fees.

Avalanche is among the biggest layer-1 networks, while Arbitrum is a scaling solution for the Ethereum blockchain.

dYdX also operates on a layer-2 solution called StarkEx. And as mentioned earlier, the DEX was initially developed on Ethereum. It recently expanded to Cosmos.

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