Nitro Upgrade Successful
On-chain analytics give the impression that the debut of Arbitrum’s Nitro was a huge success. Daily transactions have increased to new all-time highs (breaking their September 2021 and July 2022 records and clocking in 318,777 transactions yesterday), new addresses are being created at a pace that is approximately three times faster than it was prior to the upgrade, and the Layer 2 solution is clocking in approximately twice as much in daily fees as its competitor Optimism.
At this time, there is no native token available for the Arbitrum platform. Nonetheless, market participants may pursue either GMX or Dopex as two potential routes to get exposure to the expansion of the network.
GMX is a decentralized perpetual futures exchange that gives its customers the ability to trade without the need for permission and with a leverage of up to 30x. The platform is native to Arbitrum, and it already generates approximately $400,000 in daily fees on average. This makes it one of the crypto protocols with the biggest revenues, after Ethereum, Binance Smart Chain, Aave, Uniswap, and Synthetix, respectively.
The GMX and GLP tokens are the two that are used within the protocol. The utility token and governance token of the exchange is denoted by the symbol GMX, and the liquidity provision token is denoted by the symbol GLP. GMX receives thirty percent (30%) of the fees that are earned through the protocol. Since Arbitrum’s Nitro upgrade, the price of the token has increased to a new all-time high of roughly $50.2; prior to that, it had dropped to a price of approximately $12.3 in early June.
GLP, on the other hand, receives seventy percent of the fees earned by the trading protocol and has a current price of ninety-one cents. The staking of GLP occurs automatically upon purchase, which means that it can only be obtained through the GMX protocol itself. GLP token holders function as the counterparty to the leveraged traders on the exchange; as a result, GLP token success is dependent on market circumstances and trader execution. Despite the fact that the token delivers larger payouts than GMX, GLP token holders act as the counterparty.
It is possible that the GMX and GLP tokens will serve as proxies for exposure to the expansion of the Arbitrum network. This is because the GMX exchange is one of the largest native apps on Arbitrum itself. In particular, the GMX token has shown a high degree of sensitivity to earlier Arbitrum revisions. The price of the coin decreased from $18.7 to $15.2 on the day that Arbitrum’s Odyssey was temporarily postponed, but it increased from $44 to $51 on the day that the Nitro launch occurred.
Dopex is an acronym that stands for decentralized options exchange. The protocol, much like GMX, makes advantage of liquidity pools to make it possible for traders to buy or sell options contracts for digital assets without first obtaining approval. And similar to GMX, Dopex has two different tokens known as DPX and rDPX.
The DPX coin serves both a utilitarian purpose and as the protocol’s governance token. It has a fixed total supply of 500,000 tokens, of which approximately 60% are already in circulation, and it is scheduled to stop emitting tokens in the early part of 2026. The price of DPX has recently increased and is now around $419; in June, it was worth approximately $113 less. Even with this latest recovery, it is still 89.7% below its prior all-time high of $4,222.
Dopex also contributes fees to DPX’s revenue stream. The fees are collected via option purchases, swaps, and exercises. Seventy percent of these fees are distributed to Dopex liquidity providers, while the remaining fifteen percent are distributed to DPX stakers. rDPX is a token that may be used for a variety of purposes and can be utilized to increase the rewards that are created by fees.
According to data provided by DeFiLlama, the value of Dopex has decreased from approximately $154 million to approximately $29 million since it was first locked in the protocol. In comparison, the value of GMX currently stands at more than $369 million and is continuing to climb. The indicator is not always reliable, but in this instance, it suggests that the Dopex does not now enjoy the same kind of momentum as the futures exchange. In addition, it would appear that the DPX token is not as sensitive to changes in the Arbitrum ecosystem as the GMX token is. For instance, the DPX token did not react when the Nitro upgrade was implemented.
Watching for Arbitrum to Decide
There are more projects that are original to Arbitrum than just GMX and Dopex (stablecoin issuer Vesta Finance has also adopted the Layer 2 as its primary home, as have a few others). However, they are the largest, the most famous, and the most innovative of the group; because of this, it is likely that the prices of their tokens will continue to rise even if the expansion of Arbitrum does not slow down.
It is important to point out that the competitor of Arbitrum, Optimism, did not airdrop its own native token until several months after market players had the opportunity to test out its platform. It is noteworthy that Optimism’s airdrop greatly rewarded users who connected with several aspects of the ecosystem. For example, using bridges or giving to Gitcoin were two examples of these kind of interactions. Becoming familiar with the top protocols of Layer 2 might potentially be beneficial in the event that Arbitrum decides to take a similar approach with its own token.