Arbitrum Doesn’t Have a Token, But You Can Still Long It. Here’s How

GMX and Dopex, two of the highest protocols on Arbitrum, might present alternatives for merchants to realize publicity to the Layer 2 answer whereas ready for any native token it could in the future launch. 

Nitro Improve Profitable

Arbitrum’s Nitro launch was successful, on-chain metrics appear to point. Each day transactions have surged to new all-time highs (breaking their September 2021 and July 2022 data and clocking in 318,777 transactions yesterday), new addresses are being created at round 3 times the tempo as earlier than the improve, and the Layer 2 answer is clocking in about twice as a lot in each day charges as its competitor Optimism. 

Arbitrum at the moment doesn’t have a local token. Nonetheless, market individuals might pursue two avenues to realize publicity to the community’s progress: GMX and Dopex.

GMX

GMX is a decentralized perpetual futures trade that allows its customers to commerce in a permissionless method with as much as 30x leverage. The platform is native to Arbitrum and is already generating round $400,000 in each day charges on common, which makes it one of many crypto protocols with the very best revenues behind Ethereum, Binance Sensible Chain, Aave, Uniswap, and Synthetix.

The protocol has two tokens, GMX and GLP. GMX is the trade’s utility and governance token, and GLP is its liquidity provision token. GMX accrues 30% of the charges generated from the protocol. The token value has reached a brand new excessive of about $50.2 since Arbitrum’s Nitro improve; it had beforehand reached a low of roughly $12.3 in early June.

GLP, alternatively, accrues 70% of the charges generated from the buying and selling protocol and is at the moment priced at $0.91. GLP is robotically staked upon buy, that means it is just obtainable on the GMX protocol itself. Whereas the token offers increased rewards than GMX, GLP holders act because the counterparty to the leveraged merchants on the trade; subsequently, GLP token efficiency is determined by market circumstances and dealer execution.

Because the GMX trade is likely one of the largest native purposes on Arbitrum itself, the GMX and GLP tokens might function proxies for publicity to Arbitrum community progress. The GMX token particularly has confirmed delicate to earlier Arbitrum updates. On the day of the Nitro launch, the coin climbed from $44 to $51—however when Arbitrum’s Odyssey was quickly postponed, it dropped from $18.7 to $15.2.

Dopex

Dopex is a decentralized choices trade. Like GMX, the protocol makes use of liquidity swimming pools to allow merchants to purchase or promote choices contracts for digital property in a permissionless method. And similar to GMX, Dopex has two tokens: DPX and rDPX.

DPX is the protocol’s utility and governance token. It has a set whole provide of 500,000 tokens, with about 60% of them already in circulation and emissions set to finish in early 2026. DPX is at the moment valued at round $419; it reached a low of roughly $113 in June. It’s nonetheless 89.7% down from its earlier all-time excessive of $4,222.

DPX additionally accrues charges from Dopex. The charges are generated from choice purchases, swaps, and workout routines; 70% of those go to Dopex liquidity suppliers and 15% to DPX stakers. rDPX is a multi-purpose token that can be utilized to spice up rewards generated by charges.

Knowledge from DeFiLlama indicates that Dopex has shrunk from $154 million in worth locked within the protocol to roughly $29 million, whereas GMX is at greater than $369 million and rising. The metric can typically be unreliable, but on this case, it signifies that Dopex at the moment doesn’t get pleasure from the identical form of momentum because the futures trade. The DPX token moreover doesn’t seem as delicate to adjustments within the Arbitrum ecosystem as GMX—it didn’t react to the Nitro improve, for instance. 

Ready for Arbitrum

GMX and Dopex will not be the one tasks native to Arbitrum (stablecoin issuer Vesta Finance has additionally adopted the Layer 2 as its main dwelling, as have a few others). However they’re the most important, essentially the most well-known, and essentially the most revolutionary of the bunch: this makes their token costs more likely to hold appreciating ought to Arbitrum progress proceed.

It’s value mentioning that Arbitrum’s competitor, Optimism, solely airdropped its native token months after making its platform accessible for testing. Optimism’s airdrop was notable in that it closely rewarded customers who interacted with a number of sides of the ecosystem, for instance, by utilizing bridges or donating to Gitcoin. Ought to Arbitrum comply with the same plan of action with its personal token, familiarizing oneself with the Layer 2’s high protocols may probably yield advantages.

Disclosure: On the time of writing, the creator of this piece owned ETH and several other different cryptocurrencies. The data contained on this article is for academic functions solely and isn’t monetary recommendation.