GMX manages to shine despite low trading volumes, thanks to its TVL

  • GMX’s TVL surges despite low volumes.
  • Revenue collected increases, however, daily active users decline.

Recently, GMX outperformed its competitor dydx in terms of TVL. GMX’s TVL was four times that of dydx according to the data provided by Artemis. However, the trading volume on the GMX protocol was particularly low.

Read GMX’s Price Prediction 2023-2024

Low volume, high hopes

With low trading volumes, it would be hard for the GMX protocol to sustain its growth. According to data provided by DefiLlama, GMX’s TVL surged significantly over the last week. The total value locked on the protocol increased from $550 million to $648 million.

Source: DeFi Llama

Due to the increasing TVL, the amount of revenue generated by GMX also increased. According to token terminals data, the revenue generated by GMX increased by 7.6% in the last week. However, the growth in revenue could come to a halt soon.

This can be due to the declining number of daily active users on the GMX protocol. In the last 24 hours, the number of daily active users fell by 13%. If the number of daily active users continues to decline in this fashion, GMX’s revenue and volume would be in jeopardy going forward.

Source: token terminal

GMX token holders experience pain

A declining network growth implied that new addresses were not interested in buying the GMX token. Additionally, the velocity of GMX also decreased. This suggested that the frequency with which the token was being traded had fallen.

Furthermore, based on Santiments data, it was observed that the overall development activity of GMX fell significantly.

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

This suggested that the number of contributions being made on GMX’s GitHub had declined.

Source: Santiment

Interestingly, despite the low volume and the bearish sentiment around the GMX token, the protocol has continued to flourish.

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