Chainlink, The low-latency oracles will be integrated with decentralized exchange (DEX) GMX, following a successful governance proposal that sought to provide GMX v2 with more “granular” real-time market data.
Voting closed at 12:00 AM UTC on April 25th, with over 96% of participating GMX token holders voting in favor of the proposal. The authors of the proposal explain that the new Chainlink oracle was built with input from GMX core contributors to improve the functionality of the perpetual DEX and price-sensitive transactions on GMX.
Additionally, the low-latency oracles are said to enhance security, further decentralize the protocol, and improve user experience, according to Chainlink Labs integration lead Johann Eid. While these new oracles use the same oracle node operators and data aggregation mechanisms as in the existing Chainlink reference feed, Eid explained that the new oracles pull data at a “higher frequency.”
“The new Chainlink low-latency oracles will leverage the same set of oracle node operators and multi-layer data aggregation mechanisms currently deployed in existing Chainlink reference feeds, but operate via a pull-based mechanism to meet the speed requirements of DeFi derivative s. " Eid explained that enhanced security will come from low-latency oracles that provide “strong tamper resistance when settling user transactions.”
Another Twitter Commentator, Aylo, Explained to their 62,600 Followers on April 8 that the integrating Will "Reduce the Risk of Stale Price and Value Expex Traction for gmx derivatives traders. in development since 2022, is now live on the Arbitrum testnet.
In return for the service, Chainlink will receive 1.2% of the protocol fees generated by the low-latency oracle from the GMX protocol. Protocol fees include fees paid by users from margin trades, as well as standard borrow fees and swap fees. Chainlink will continue to refine its oracle service for GMX as the protocol continues to “scale” and “evolve,” Eid said. However, GMX does not appear to be the first perpetual DEX to incorporate a new type of oracle.
Matt Losquadro, a former ambassador for on-chain derivatives platform Synthetix, said it was the first to integrate a similar solution, which was observed by a member of the GMX community before the proposal: Aribitrum native GMX also launched on Avalanche, January 2022. It currently has a total value locked (TVL) of $669 million across the two networks, according to DeFiLlama.
It is currently the largest protocol on Arbitrum, itself TVL's largest Ethereum layer 2 network. Chainlink oracles launch on Arbitrum in August 2021., wrapped Ether (wETH) and wrapped Bitcoin (wBTC) are the three largest tokens held on GMX, with shares of 43.6%, 23.2% and 16% respectively.
