GMX (GMX)

GMX (GMX) is the governance and fee-sharing token of GMX, a decentralized exchange where traders open leveraged long and short positions on cryptocurrencies without a broker or an order book run by a company. Holders vote on how the protocol is run, and a share of the trading fees is used to buy GMX on the open market for stakers.

GMX the token is separate from the liquidity tokens the exchange issues. Traders on GMX trade against pools of assets supplied by liquidity providers: first a single pool called GLP, and since 2023 a set of market-specific pools called GM. The exchange runs mainly on Arbitrum and Avalanche, and competes with order-book venues such as dYdX and Hyperliquid.

Most exchanges match a buyer with a seller. GMX works more like a bookmaker funded by its customers. A group of savers puts money into a shared pot. Traders then place bets on whether prices will rise or fall, and the pot pays the winners and keeps the losses of the losers, along with fees. Prices come from outside price feeds rather than from haggling inside the exchange, so a large trade does not have to hunt for someone willing to take the other side, and it suffers less slippage.

The GMX token is like a share in the bookmaker's takings and a vote in how it is run. Part of every fee the exchange earns is set aside to buy GMX, and people who lock up their tokens are meant to receive a share of what is bought.

GMX grew out of Gambit, a small exchange on BNB Chain, and launched on Arbitrum in September 2021, adding Avalanche in January 2022. Its first version, now called V1, was built around GLP, a basket of assets such as ETH, bitcoin and stablecoins that took the other side of every trade. GLP became one of the best-known "real yield" products in decentralized finance because it paid out actual trading fees rather than newly printed tokens.

GMX V2 launched in 2023. It replaced the single pool with isolated GM pools, one per market, so that losses in a risky market would not spread to the rest, and it later added GLV vaults that spread money across several GM pools.

Trading, borrowing, liquidity pool swap and liquidation fees on GMX are split between liquidity providers, the treasury and GMX stakers. Until late 2024 stakers were paid in ETH or AVAX. Since October 2024 the stakers' share is used instead to buy GMX on the open market, a model the DAO calls "buyback and distribute". On V2 the stakers' share is 27 percent of fees:

• $\text{Fees}$ is the total collected from trading, borrowing, swaps and liquidations in a period.
• $0.27$ is the 27 percent share allocated to GMX buybacks under V2.
• $\text{Buyback budget}$ is the amount spent buying GMX for distribution.

For example, if V2 collects 2 million dollars in fees in a month, $2{,}000{,}000 \times 0.27 = 540{,}000$, so 540,000 dollars goes to buying GMX. In 2026 distribution of the bought-back tokens was suspended, with the tokens held in the treasury until the GMX price reaches a target set by governance, so for a time stakers received no new rewards. Staked GMX also carries voting weight in the DAO's governance.

On 9 July 2025 an attacker drained about 42 million dollars from the V1 GLP pool on Arbitrum. GMX traced the theft to a re-entrancy flaw, a bug that let the attacker call back into a contract before it had finished updating its records, which was used to inflate the price of GLP and withdraw more than the pool held. V2, the GMX token and the GM pools were not affected.

GMX offered the attacker a 10 percent bounty and no legal action if the funds came back. Within days most of the money was returned and the attacker kept about 5 million dollars. In August 2025 GMX completed a roughly 44 million dollar compensation plan for GLP holders, paid in GLV tokens and topped up from the treasury. The incident is a reminder that hacking risk remains even in older, heavily used contracts.

• Liquidity provider risk. Pool depositors act as the counterparty to traders, so a run of winning trades can cause real losses for them.
• Oracle dependence. Because prices come from external feeds, errors or manipulation of those feeds could harm the exchange.
• Leverage. Traders using high leverage on perpetual futures can be liquidated quickly in volatile markets, much like a margin call at a broker.
• Regulation. Leveraged crypto derivatives are tightly restricted in many countries, and decentralized venues face growing scrutiny over who may use them.
• Competition. Rivals with deeper order books, especially Hyperliquid, have taken a large share of on-chain derivatives volume since 2024.

• GMX
• GMX documentation