What is GLP VLP GM
What is GMX?
GMX is a decentralized perpetual trading protocol that allows trades to perform leverage trading on BTC, ETH, AVAX, LINK, and UNI on Arbitrum and Avalanche chains. It utilizes the pool of liquidity amassed from LP to act as the counterparty of the leveraged traders.
What is GLP?
GLP is the liquidity token for GMX V1, which consists of an index of assets used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset. The price for minting and redemption is calculated based on (total worth of assets in index including profits and losses of open positions) / (GLP supply).
GMX protocol earns fees from swap, GLP minting, GLP burning, liquidation & margin trading. The fees distributed to GLP holders are based on the number after deducting GMX’s referral rewards (5%-20% of the swap/trade fee depending on referral tier) and the network costs of GMX’s keepers (~1% of the total fee).
As GLP holders provide liquidity for leverage trading and act as traders' counterparts, they will make a profit when leverage traders make a loss and vice versa.
What is GM
The GM token serves as the liquidity token within GMX V2's individual pools. A GM pool comprises both a long token and a short token, with ETH tokens supporting long positions and USDC tokens supporting short positions in the case of the ETH-USDC GM pool. Users can mint GM tokens with either single asset or paired assets, but can only withdraw in paired assets based on the pool balance when request.
Unlike GMX V1, where assets were directly used and exchanged for leveraged trading, GMX V2 employs synthetic price feeds. This means that the liquidity within GM pools serves as collateral for trades. Liquidity providers can earn fees from various sources, including leverage trading, borrowing fees, and swaps.
In GMX V1, protocol fees were collected in ETH, and users needed to manually claim their rewards. In GMX V2, fee rewards are integrated into the GM token's price. Consequently, GM tokens from each pool are only affected by fluctuations in their respective underlying assets, thereby reducing the risk exposure for liquidity providers.
What is Vela?
Vela Exchange is a decentralized exchange with advanced perpetuals trading capabilities, community focused incentives, and scalable infrastructure. The Vela Exchange trading platform provides significant advantages over centralized exchanges with fair, equitable access to platform rewards, self-custody of assets, etc. Vela supports perpetual futures, spot and OTC trading on the market of cryptocurrencies, forex and market cap.
What is VLP?
VLP is the liquidity provider token for VELA Exchange platform. It’s based on USDC staking, and can be redeemed for USDC at any time. VLP holders can earn fees based on generated trading volume on the platform.
To ensure the supply of VLP is stable, a cooldown period is applied in the mechanism of VLP minting. Every time a new VLP is minted, it will start a 2-day cooldown period for your VLP balance. After this period, VLP balance can be redeemed for USDC at any time until any new VLP is minted.
VLP is used to provide liquidity for traders, allowing them to take positions with leverage. If traders take a loss then the VLP holders will make profit, and vice versa. VLP stakers can share the protocol income including position opening/closing fee, funding fee generated by trading activity, as well as VLP minting & redemption fee.
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