In a latest weblog put up, cryptocurrency legend and former BitMEX CEO Arthur Hayes mentioned he holds sizable baggage of GMX and LOOKS tokens. In line with Hayes, his major reasoning for investing in each was their platform income and their potential to outperform normal Treasury payments.
Let’s take a quick have a look at on-chain knowledge and examine GMX and LOOKS to rivals to find out whether or not Arthur’s assumption will work out.
GMX utilization cooling after a robust November
The week previous to Nov. 16 offered decentralized finance (DeFi) with a big inflow in charges after the centralized trade (CEX) exodus triggered by FTX’s chapter. The short-term excessive inflows to DeFi propelled GMX to outperform Uniswap in protocol charges.
On Nov. 28, GMX earned about $1.15 million in day by day buying and selling charges, which surpassed Uniswap’s $1.06 million in buying and selling charges on the identical day.
Whereas utilization of GMX could also be reducing, the token is outperforming the business. The GMX token is barely 8% away from an all-time excessive, after gaining 59% prior to now 30-days.
Since Uniswap is the closest competitor to GMX, evaluating the 2 protocols can present which customers want to make use of for buying and selling. Except for the price flip on Nov. 28, Uniswap continues to outperform GMX by way of price income and day by day energetic customers. In contrast to Uniswap, GMX distributes charges to stakers of assorted GMX and GLP tokens.
The 90-day peak for Uniswap charges is $5.9 million, whereas GMX’s excessive in day by day charges is barely $1.4 million. The foremost distinction in peak charges might present that GMX has reached capability on the subject of platform utilization.
The charges that GMX accrues are break up 30% to GMX token holders and 70% to GLP holders. The present homepage for GMX estimates an annual proportion yield of 10% for GMX tokens and 20% for GLP tokens. Whereas GLP would match Hayes’ 20% annual yield objective, liquidity suppliers are prone to impairment loss and worth declines, making it troublesome to make sure success towards the conservative Treasury invoice technique.
OpenSea utilization continues to dominate LooksRare
LooksRare, which can also be the house of the LOOKS token, was additionally talked about by Hayes because of the charges the NFT protocol earns. Thus far, NFT marketplaces, together with Coinbase, have struggled to chip away at OpenSea’s market dominance.
Whereas OpenSea appears to have a pure circulate of day by day energetic customers between 35,000 and 50,000, LooksRare has a small vary of 350 to 500 customers. Utilizing this metric, OpenSea is 100 occasions greater than LooksRare and the development doesn’t appear to vary over a 90-day timeframe.
One other distinction between the 2 protocols is that OpenSea doesn’t have a token that emits rewards by way of staking and inflationary minting. The rewards emission might hit Hayes’ 20% objective, but it surely also needs to be famous that LooksRare is infamous for wash buying and selling. The first goal of those wash dealer is to realize extra LOOKS tokens, however this might have the impact of diluting the value.
The lately introduced UniSwap NFT aggregator might assist propel LooksRare to realize extra “genuine” transactions since customers can buy LooksRare NFTs with out ever visiting the positioning.
The present price distribution is closely concentrated towards OpenSea. Over the previous 90 days, OpenSea reached a peak of $2.5 million in day by day charges, whereas throughout the identical interval LooksRare solely earned over $200,000 in day by day charges as soon as.
Investigating the protocol fundamentals talked about by Hayes are an vital first step when contemplating investing in DeFi and altcoin. Trying on the aggressive panorama for each LooksRare and GMX, it might take rather more adoption for both protocol to overhaul the present leaders. Moreover, the 20% objective Hayes units out is likely to be a stretch when analyzing inflated emissions and token costs.
The views, ideas and opinions expressed listed below are the authors’ alone and don’t essentially mirror or symbolize the views and opinions of Cointelegraph.
