1) "Talking about the mechanism difference between $ GMX and $DYDX and the next wave of bull market deduction" In the long run, the investment projects in the currency circle must be based on whether the project can make money, and the projects that cannot make money will eventually return to zero. There are currently two types of the most profitable: One is to become a super-profitable online mine like $ LDO , including downstream projects, such as $SSV, which helps mine decentralization. The second is the perpetual contract track. Talk about differences for reference.

2) Note: This long tweet discusses the long-term development prospects of the track and the project, and has nothing to do with whether it can rise now! From the current data, $ GMX and $dydx are close in cost of daily capture, but still second to $ UNI . The handling fees generated by the two today are around 300,000 US dollars, which is a considerable distance from the centralized exchange. However, it is expected that in the next round of bull market, its trading volume will not only surpass $ UNI , but also many CEXs.

3) Compare the advantages and disadvantages of each: $ GMX experience is similar to perpetual, but it is actually leverage. The platform is divided into several categories: One is contract players, open long and open short. The second is market makers, who gamble against each other. This person uses U to buy GLP, and the platform's GLP is a combination of BTC, ETH and stable coins. That is, contract players and market makers are betting against each other. The third is the project party, the platform is DEX, but the core matching agreement KEEPER is not disclosed.

4) Under the mechanism of $ GMX , the coolness is that the transaction has zero slippage, because the opponent is the pool of GLP. Wherever you want to open, you can level it, and when you want to level it, you can level it at any time. Similar to Binance, even if you place a plan order and Bitcoin falls to 3,000 to open a long position, if you accidentally insert a pin there at night, you will not be able to open it, because there is probably no opponent. Centralized exchanges are long-short bets, but GMX is not.

5) The coolness of GMX comes at a price: On exchanges such as Binance, there are funding fees that stabilize both long and short sides. For example, in a big bull market, most people are long, and many people make money, so the money is not given by Binance, but by short sellers. But if the long position is 1 billion, the short position is only 100 million, and the long position is all profitable, who will give the 900 million? Funding costs would make multiple armies pay the air force every few hours when the air force is low, and vice versa.

6) But GMX does not work. Under the mechanism of GMX, especially in the bull market. If a user wants to short on GMX, he will face two situations: One is that short selling needs to borrow funds from the GLP pool to sell short, and there is a handling fee. Second, short selling often loses money, but unlike Binance, he can receive funding fees, which is a hard loss. At this time, the multi-army on GMX is very cool, and they continue to draw money from the GLP pool.

7) Under this mechanism, when the bull market comes, no one will short it! what will happen then? All the troops! Even if it is not in a bull market, in order to prevent the pool from being drained, various restrictions must be added, including the opening of single-currency single-currency opening limits, controlling all open positions, etc.-but there are still many uncontrollable factors, and it is difficult to guarantee a certain point in time. The army made a lot of money. Not only that, GLP is similar to a stable currency + mainstream currency fund combination, which will have more hidden dangers in the bull market.

8) First of all, users holding GLP have three expectations in the bear market: One is to hold an index fund, although some of them are stable, but When the market rises, GLP also rises, and the rise is less; when the market falls, GLP also falls, also because the stable currency also falls less. The second is to look forward to receiving platform transaction fee dividends. GLP is currently divided into 70%. The third is to expect GLP to get a part of the money lost by players. These expectations change in a bull market.

9) Corresponding to the first expectation: users in the bull market may not want to hold stable coins, but want to stud more coins to earn more. As a result, the GLP pool becomes shallower, the total amount of positions opened by users is limited to a smaller amount, and the transaction costs are therefore also smaller. The second one: platform transaction fees are reduced, and users don’t even want to do GLP! The third one: Most players are making money when they open long positions. At present, I have read many articles and think that this is not the case. This should be the illusion that he does not play contracts.

10) I have experience in betting against exchanges and users. In the past, there was an exchange with a thousand-fold contract. I studied a set of special tactics, with limited losses and huge profits. Under high leverage, there is no need to repay the principal, and the profit-loss ratio is terrifying. As a result, my group of friends and I pulled the exchange to unplug the network cable. My Rug Pull long order earned tens of thousands of U and my position was liquidated. I was so angry that everyone withdrew all the coins. He is betting against each other because of the next game, and GLP is also betting against each other.

11) Therefore, GLP may also be wiped out in the bull market, especially under its mechanism, everyone is not short at a certain point in time, and they are all long, just when the market is all rising again - remember, don't think that this situation is not good Yes, there will definitely be people who are short-selling, etc. As mentioned earlier, Binance and the like will, but GMX may not. To sum it up, GMX needs to solve several problems: trading cap, GLP risk, death spiral in extreme cases of bull market, etc. There are only two paths.

12) Solution 1: Turn to a Binance-like mechanism to create a truly sustainable and operate in a form similar to $DYDX. Solution 2: Take some kind of optimization on the current solution. I don’t know what it is, and I also think that the project side may not have too many good solutions. The current X4 version may still be solving the problem of supporting more currencies . Question: If it is sustainable like DYDX, the upper limit can become very large, what will happen?

13) Let me talk about the conclusion first. If $ GMX solves the above problems, the price of $ GMX should rise several times soon from the current price, and 10 times or even more will arrive in the bull market. I will definitely recommend stud immediately. The GMX economic model is powerful and is the leader of real income, and all fees are allocated to GMX and GLP. As long as the above problems are resolved, the trading volume of GMX will increase sharply. Assuming that it reaches half of the volume of OK and Binance in the future, the dividends will also be terrible.

14) Now back to DYDX, actually understand the above, DYDX can finish in a few sentences: Although DYDX is a decentralized exchange, its order book experience is actually similar to Binance, balancing both long and short sides, and introducing market makers. At the same time, when its new version is launched, its trading experience should continue to improve. Generally speaking, you can understand it as a new exchange that is still vying for the market, but its mechanism can carry a huge volume in the future.

15) The shortcomings of DYDX are also obvious, and the problem of token dividends may not be solved. The current transaction fees are all distributed to the project party - in fact, the projects of American companies cannot directly distribute dividends due to regulatory relations. In the first half of the year, it will be fully DAOized. At that time, DAO will make proposals. I am not sure whether this can avoid legal issues, such as allowing tokens to be distributed as dividends, or all profits will be used for repurchase and destruction.

16) Most importantly, in 2023, it is foreseeable that the share of decentralized perpetual contracts will further increase, and the leading probability will still be DYDX and GMX. GMX experience is good, but the cost is high, and the future development space depends on the resolution of various problems. DYDX has a high upper limit and low transaction fees. If there is no major change in GMX, the gap between the two will soon widen as the bull market monitors. For more information, please visit the research area of http:/dayu.xyz">http:/dayu.xyz .

17) Supplementary corrections to some points: In a unilateral extreme rising market, GLP will also rise, which can make up for the losses caused by long positions to a certain extent. Relatively speaking, some markets in a big bear market will be more terrifying, because GLP is also falling, but the fact is that GMX performs well in a bear market, and there are many mechanisms to control positions. There are many DYDX-like perpetuals, such as dividends www.apex.exchange">www.apex.exchange All good.