GMX is a decentralised perpetual futures and spot exchange built on Arbitrum and Avalanche, known for its unique liquidity model that lets traders open leveraged positions against a multi-asset liquidity pool rather than a traditional order book. Launched in 2021, GMX uses a GLP (GMX Liquidity Pool) model: liquidity providers deposit a basket of assets (ETH, BTC, stablecoins) and receive GLP tokens. Traders trade against this pool; when traders lose, GLP holders gain, and vice versa. GLP holders earn 70% of all trading fees in real yield (ETH on Arbitrum, AVAX on Avalanche), making it a popular ‘real yield’ DeFi investment. GMX v2 (2023) introduced isolated liquidity pools (GM pools) for specific pairs, reducing systemic risk and enabling more asset listings. GMX is the governance and utility token: staked GMX earns esGMX rewards, multiplier points, and a portion of protocol fees. GMX became influential as a ‘real yield’ protocol — generating actual trading fee revenue and distributing it to token stakers, as opposed to inflationary token emissions. GMX v2 added synthetic assets and improved capital efficiency. The GMX model has been forked hundreds of times (Vertex, Kwenta, etc.) and is considered the reference design for decentralised perpetuals with liquidity pools.
Example: An investor deposits $10,000 of ETH, BTC, and USDC into GMX’s GLP pool on Arbitrum. They receive GLP tokens and earn 15-25% APR in ETH from trading fees as traders use the pool for leveraged positions. Unlike yield farming with inflationary token rewards, this yield comes from real trading activity — GMX’s ‘real yield’ positioning attracted capital during the 2022 bear market when most farms dried up.
Learn more: GMX Exchange
