GMX proposes allocation of 1.2% protocol fees to Chainlink for its services, analysts turn bullish

GMX is a decentralized exchange protocol deployed on Arbitrum and Avalanche chains. The protocol recently proposed payment of 1.2% of its GMX protocol fees to Chainlink, in exchange for its services to the exchange. 

LINK holders and experts on crypto Twitter believe this development is bullish for the oracle solution’s token as it would contribute to increase in revenue for Chainlink. 

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GMX protocol proposes 1.2% protocol fees be awarded to Chainlink

GMX, the decentralized exchange employs Chainlink’s services for sharing real-time data with smart contracts. The decentralized provider uses price oracles to reduce latency, or time delay. 

The proposal is intended to promote resilience towards maintenance and development of key segments of the GMX protocol. Therefore the proposal suggests that Chainlink should be the oracle partner of GMX V2 and GMX exchange, the exclusive launch partner of their new low-latency oracles.

Chainlink’s newest oracles have been under development since last year and they were designed to leverage the strength of LINK network’s decentralization and further reduce latency. The team has received development inputs from GMX’s core contributors. 

GMX proposes an allocation of 1.2% of protocol fees generated by the protocol towards the services of Chainlink for providing their oracle solution, alongside support both technical and developmental, utilized by the exchange platform. 

Who has access to Chainlink’s low-latency oracle services?

Currently, the Arbitrum testnet has a beta version of Chainlink’s newest oracles. Core contributors are testing LINK network’s service for its low-latency, accuracy and technical support. 

GMX’s proposal would offer upwards of $2.5 million a year to Chainlink for its services. The response of the GMX community is positive and there are questions on how low-latency oracle solutions by Chainlink power GMX protocol. 

Chainlink Lab’s VP of go-to-market expressed his optimism over the proposal. 

What to expect from LINK

Based on on-chain data from IntoTheBlock, 68,540 addresses bought upwards of 406 million LINK tokens between $6.3 and $7. This level represents a support zone from LINK and the asset’s price could nosedive to this level in the event of a decline. 

Cryptomaximus78, a crypto expert and analyst, notes a typical pattern in the LINK price chart. Buyers step in and LINK price recovers after facing “pressure.”

LINK/USD 3D price chart 

As seen in the chart above, LINK price climbed during the BTC capitulation event, and maximum pressure events marked with yellow dots signaled a rally in LINK. There have been three consecutive events in 2022-23 and the corrective pattern represented by ABC wave is now complete. The expert applies the Elliott Wave Theory and predicts that LINK is ready to begin wave 2 and a massive uptrend. LINK is likely prepared for an impulse wave, following the corrective pattern that proceeds wave 1.