Today, GMX, the largest decentralized perpetual exchange by Total Value Locked (TVL) on Arbitrum and Avalanche, published a case study featuring insights from its Business Development Contributor, Fredegar Christensen, and Communications Contributor, Jonezee, on GMX’s collaboration with Arbitrum and Chainlink to build a decentralized exchange that rivals the user experience of centralized platforms.
The study explores how Arbitrum’s Ethereum L2 and Chainlink Data Streams allow GMX V2’s computationally dense smart contract protocol to leverage lower gas fees and faster price updates that make DeFi products like perpetual futures contracts possible.
Data Streams is a pull-based oracle solution through which high-frequency market data is continuously made available offchain and pulled onchain as needed by users’ transactions. This allows dApps to consume data more cost-effectively and at lower latencies while reducing the risk of frontrunning and MEV by keeping price data private until transactions are settled.
As the industry-leading decentralized computing platform, Chainlink’s expanding suite of web3 services is secured by the same time-tested oracle network that has delivered over 11.5 billion data points and enabled more than $9.5 trillion in transaction value onchain.
The GMX case study underscores Chainlink’s fundamental role in building highly secure and performant decentralized exchanges that attract more users to DeFi by offering UI/UX optionalities that previously weren’t possible:
“Because Data Streams’ next-gen low-latency oracle solution is more granular, and pull-based, users now enjoy an even more CEX-like trading experience, while knowing that GMX V2 is underpinned by Chainlink’s industry-standard security infrastructure.”
During Data Streams’ mainnet launch at SmartCon 2023, Chainlink co-founder Sergey Nazarov outlined how low-latency oracles might bring DeFi to the masses.
“With the DeFi markets representing only a tiny fraction of the over $1 quadrillion of notional value in traditional markets, Chainlink Data Streams is the low-latency data solution needed to unlock next-generation DeFi applications that support the performance and security requirements to achieve mass adoption,” he said.
The GMX case study attributes V2’s achievements – including $360 million TVL, 104,000 unique users, and nine supported markets – to the integration of Chainlink Data Streams and an ongoing “inspiring” collaboration with Chainlink Labs:
“Chainlink has a proven track record of delivering value for critical DeFi infrastructure. It is not enough to just be in the crypto space for a long time; Chainlink has earned the trust of the large majority of DeFi protocols and positioned itself as foundational Web3 infrastructure. As GMX endeavours to be a DeFi staple, it was only natural that this aspiration be met through a collaboration with a pioneering team of builders as well-established as Chainlink.”