Is DeFi back? GMX rallies toward all-time high and LOOKS price gains 30%

In a caller blog post, cryptocurrency fable and erstwhile BitMEX CEO Arthur Hayes mentioned helium holds sizable bags of GMX and LOOKS tokens. According to Hayes, his main reasoning for investing successful some tokens was their level gross and the imaginable of some assets to outperform modular treasury bills. 

Let’s instrumentality a little look astatine on-chain information and comparison GMX and LOOKS to competitors to find whether Arthur’s presumption volition enactment out. 

GMX usage cooling aft a beardown November

The week anterior to Nov. 16 provided decentralized Finance (DeFi) with a significant influx successful fees aft the centralized speech (CEX) exodus triggered by FTX’s bankruptcy. The impermanent precocious inflows to DeFi propelled GMX to outperform Uniswap successful protocol fees.

On Nov. 28, GMX earned astir $1.15 cardinal successful regular trading fees, which surpassed Uniswap’s $1.06 cardinal successful trading fees connected the aforesaid day.

GMX fees and regular progressive users. Source: Token Terminal

While usage of GMX whitethorn beryllium decreasing, the token is outperforming the industry. The GMX token is lone 8% distant from an all-time precocious aft gaining 59% successful the past 30-days.

GMX token performance. Source: Delphi Digital

Since Uniswap is the closest rival to GMX, comparing the 2 protocols tin amusement which users similar to usage for trading. Aside from Nov. 28 wherever the interest flip is noticed, Uniswap continues to outperform GMX successful presumption of interest gross and regular progressive users. Unlike Uniswap, GMX distributes fees to stakers of assorted GMX and GLP tokens.

The 90-day highest for Uniswap fees is $5.9 cardinal whereas GMX’s precocious successful regular fees is lone $1.4 million. The large quality successful highest fees whitethorn amusement that GMX has reached capableness erstwhile it comes to level usage.

The fees that GMX accrues are divided 30% to GMX token holders and 70% to GLP holders. The existent homepage for GMX cites the estimated APY connected the GMX tokens is astir 10% and for GLP tokens, 20%. While GLP would acceptable Hayes’ 20% yearly output goal, liquidity providers are susceptible to impairment loss and terms declines making it hard to guarantee occurrence against the blimpish treasury measure strategy.

Fees earned by Uniswap and GMX. Source: TokenTerminal

OpenSea usage continues to predominate LooksRare

LooksRare, which is besides the location of the LOOKS token, was besides mentioned by Hayes owed to the fees the NFT protocol earns. To date, NFT marketplaces, including Coinbase, person struggled to spot distant astatine OpenSea’s marketplace dominance.

While OpenSea seems to person a earthy travel of regular progressive users betwixt 35,000 and 50,000, LooksRare has a tiny scope of 350 to 500 users. Using this metric, OpenSea is 100 times bigger than LooksRare and the inclination does not look to alteration implicit a 90-day timeframe.

Further quality betwixt the 2 protocols is that OpenSea does not person a token that emits rewards done staking and inflationary minting. The rewards emanation whitethorn deed Hayes’ 20% goal, but it should besides beryllium noted that LooksRare is notorious for lavation trading. The superior nonsubjective of these lavation trader is to summation much LOOKS tokens, but this could person the effect of diluting the price.

Daily progressive users of LooksRare and OpenSea. Source: TokenTerminal

The recently announced UniSwap NFT aggregator could assistance propel LooksRare to summation much “authentic” transactions since users tin acquisition LooksRare NFTs without ever visiting the site.

The existent interest organisation is heavy concentrated toward OpenSea. Over the past 90-days, OpenSea reached a highest of $2.5 cardinal successful regular fees, whereas during the aforesaid play LooksRare lone earned implicit $200,000 successful regular fees once.

Fees earned by LooksRare and OpenSea. Source: TokenTerminal

Investigating the protocol fundamentals mentioned by Hayes are an important archetypal measurement erstwhile considering investing successful DeFi and altcoin. Looking astatine the competitory scenery for some LooksRare and GMX, it would instrumentality overmuch much adoption for either protocol to overtake the existent leaders. Furthermore, the 20% extremity Hayes sets retired mightiness beryllium a agelong erstwhile analyzing inflated emissions and token prices.

The views, thoughts and opinions expressed present are the authors’ unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.