Altcoin
GMX’s recent recovery could be attributed to this ‘LINK’. Here’s how…
- GMX proposed to allocate 1.2% of its revenue to the Chainlink network
- GMX’s TVL exhibited a promising recovery and retraced all its losses since the USDC depegging fiasco
As part of its endeavor to bring more decentralization, popular derivative exchange, GMX, proposed to make Chainlink [LINK] the oracle partner of its V2.
The main economic criterion for this proposal was the allocation of 1.2% of protocol fees earned by GMX to the Chainlink Network for the future development of their low-latency oracle solution.
Read GMX’s Price Prediction 2023-24
Solving the latency problem
With the goal of enabling high-speed DeFi applications like derivatives, Chainlink has been working on its low-latency oracle solution. Currently, most Web3 derivatives are restricted by latency challenges.
Using low-latency blockchains and oracles, users can build high-speed DeFi applications but with the added decentralization guarantees that give users ownership of digital assets. This solution will also help in cutting down transaction settlement time and mitigate front running.
As of 6 April, the solution was still in its testing phase with its beta version on the Arbitrum testnet. As part of the proposal, GMX’s governance team also recommended to make GMX the exclusive launch partner of the upcoming low-latency oracle solution.
GMX sees jump in revenue
On a related note, data from Token Terminal showed a decent growth in GMX’s trading activity. The trading volume surged nearly 30% to $470 million since the start of April.
The jump in volume had a cascading impact on the revenue collected, or the protocol fees as mentioned earlier, which soared 35% on a month-to-date (MTD) basis.
TVL makes an impressive recovery
The total value locked (TVL) on the DEX’s smart contracts showed a promising recovery and retraced all its losses since the USD Coin [USDC] depegging fiasco. The TVL logged weekly gains of 3.28% to hit $1.16 billion at press time, per data from DeFiLlama.
At the time of writing, GMX was the top derivative exchange in terms of TVL, well ahead of the second-placed dYdX.
Source: DeFiLlama
Realistic or not, here’s GMX market cap in BTC terms
At the time of writing, GMX, the native token of the DEX, was down 2.76% in the 24-hour period, per CoinMarketCap. The price fell sharply in the latter part of March. However, it managed to recover and post 30-day gains of 10.57% at press time.
