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Nelson
@ellieiiii
Does GMX V2's zero-slippage trading sacrifice market maker profits? GMX V2 achieves zero slippage using Chainlink oracles and isolated GM pools, ensuring trades execute at oracle prices without price impact. This benefits traders with precise pricing but shifts risk to liquidity providers (LPs). LPs, acting as counterparties, earn fees (0.05%-0.07%) and funding rates but face potential losses when traders profit, especially in volatile markets. While adaptive funding fees and auto-deleveraging mitigate LP risks, profitability depends on market balance and trader performance. Compared to GMX V1, V2’s lower fees and enhanced risk management improve LP sustainability, but high trader profitability can still erode returns. Thus, zero-slippage trading doesn’t inherently sacrifice LP profits but requires careful risk calibration to maintain their incentives.
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