Active user base soars on GMX, but there’s a catch

• GMX recorded a slight decline in TVL in the last month.
• Network activity, however, grew during the same period. 

Leading decentralized exchange (DEX) for perpetual contracts GMX ranked as the protocol housed within the Avalanche network [AVAX] with the second-highest total value locked (TVL) decline in the last month, on-chain data firm IntoTheBlock noted in a recent post on X.

According to the data provider, Kyberswap, GMX and Abracadabra recorded TVL declines of $1.07 million, $869,000, and $738,000 in the last 30 days.

GMX excelled on other fronts

Although the protocol recorded a TVL decrease in the last month, the uptick in GMX’s user activity during that period drove up its trading volume, transaction fees, and revenue obtained from the same.

AMBCrypto found that during the period under review, trading volume on the DEX totaled $576 million. This represented a 19% growth from the $485 million that was recorded in trading volume in October. 

Due to the high transaction volume, transaction fees also rallied. Data from DefiLlama showed that GMX users paid a total sum of $12 million as fees to use the DEX during the 30-day period. 

This figure was a 140% markup from the $6 million recorded in October. It also represented the highest monthly fees seen by the protocol since June. 

Further, monthly revenue also surged. In November, GMX recorded a revenue sum of $3.6 million from the transaction fees paid by its users. For context, this was also its highest monthly revenue since June, when it recorded $3.5 million. 

Source: DefiLlama

GMX becomes less volatile

In the last month, the value of the protocol’s native token, GMX, also grew. According to CoinMarketCap, the altcoin’s price rose by 9% to exchange hands at $51.07 at press time. 

With the alt’s value consolidating within a tight range in the past few weeks, its price volatility has significantly reduced.

Readings from its Bollinger Bands observed on a daily chart revealed a narrow gap between the upper and lower bands of the indicator.

When the gap between the upper and lower bands of an asset’s Bollinger Band indicator narrows, it’s known as a Bollinger Band Squeeze. This suggests that volatility in the market is decreasing.

Likewise, the token’s Average True Range (ATR) – which measures market volatility by calculating the average range between high and low prices over a specified number of periods – has trended downward since 18th November.

Realistic or not, here’s GMX’s market cap in ARB’s terms

When this indicator experiences a decline, it suggests that the price of an asset is less volatile and is more likely to stay within a specific range.

At press time, GMX’s ATR was 2.67.

Source: GMX/USDT on TradingView