GMX, a decentralized perpetual exchange, launched on Arbitrum in September 2021, making a significant impact on the DeFi community. Its unique features, such as being the first DEX and perpetual market on the Arbitrum ecosystem, and a shared liquidity pool system, attracted attention and contributed to its rapid growth. Within a month, GMX’s total value locked (TVL) surpassed $30 million, with an average daily trading volume of $1.4 million. Today, GMX has expanded to include liquidity mining, an NFT marketplace, and a yield farming platform, with a TVL of over $450 million and a 24-hour trading volume of $1 million. The success of GMX also led to a substantial increase in the market price of its native token, GMX, which appreciated by more than 200% since its launch.
The launch of GMX on Arbitrum had a significant impact on the growth of the ecosystem. By offering users the flexibility of perpetual swaps without an expiry date, GMX attracted a larger pool of seasoned and novice traders, contributing to increased liquidity and activity. The non-expiring nature of GMX’s perpetual contracts encouraged higher trading volumes among new users, who were not bound by contract end dates. This heightened activity had a positive effect on the overall liquidity of Arbitrum, incentivizing more people to join and participate in the ecosystem.
Drawing from the success of their previous venture, Quickswap, the largest DEX on Polygon for over three years, the team behind Kinetix Finance is now building on Kava Chain. Kava Chain combines the speed and interoperability of Cosmos with the developer power of Ethereum. Kinetix aims to be a comprehensive DeFi hub, offering advanced tools and sophisticated trading strategies that were previously unavailable on Kava or Cosmos ecosystems.
At launch, Kinetix will introduce a v3 DEX, similar to Uniswap v3, with a shared liquidity system. This decentralized trading venue will be the first of its kind on Kava Chain, enabling power users to access a perpetual swaps market for leveraged trading, based on QuickPerps, a GMX fork. The Kinetix perpetual market offers advanced traders various benefits and trading options, including margin trading with up to 50x leverage, copy trading, hedging, safer liquidations, better price execution, and more.
The Kinetix team’s past experience with Quickswap and Quickperps (a GMX fork) provides valuable insights into what contributes to a successful DeFi protocol. Kinetix inherits the core factors that contributed to Quickswap’s success, namely being the first shared liquidity DEX and the first perpetual swap market on the Kava Chain and Cosmos ecosystems. While the outcomes remain uncertain, the foundation laid by Quickswap’s success increases the potential for Kinetix to follow a similar trajectory.
The ultimate goal of DeFi is to transform traditional financial systems and bring financial inclusion, transparency, and innovation to the world. However, challenging the grip of central banks, commercial banks, and stock exchanges is not an easy task. These institutions have established trust and confidence among the general public, who are accustomed to their services and regulations. Breaking away from the traditional financial system requires individuals to take risks and embrace state-of-the-art DeFi protocols like GMX and Kinetix.
While there are inherent risks associated with early adoption of DeFi, the potential rewards, both financially and in terms of fostering innovation, are significant. The movement of activity and liquidity from traditional finance to DeFi showcases the possibilities and advantages of the decentralized financial ecosystem. As more individuals become aware of and experience the benefits of DeFi, the transformation of traditional finance becomes more feasible.
GMX’s launch on Arbitrum and subsequent growth have demonstrated the demand for decentralized perpetual markets and shared liquidity systems. Kinetix, building on the success of Quickswap, aims to replicate this success on the Kava Chain, offering advanced trading tools and a perpetual swaps market. As DeFi continues to evolve and expand, protocols like GMX and Kinetix play a crucial role in transforming the financial landscape and empowering individuals with greater control over their financial future.