Written by: Deep Tide TechFlow
On July 9, the veteran on-chain perpetual contract exchange GMX suffered a heavy blow.
Hackers exploited a reentrancy vulnerability in the GMX V1 smart contract to steal approximately $42 million in crypto assets from its GLP liquidity pool, including USDC, FRAX, WBTC, and WETH.
On-chain data shows that approximately $9.6 million in assets have been transferred via cross-chain bridges. The GMX team has proposed terms to the attacker: if 90% of the funds are returned within 48 hours, a 10% 'white hat bounty' will be granted, and they will be exempt from liability.
However, although 40 million is not a small number, this matter did not spark widespread discussion.
A heart-wrenching comment is:
"Who still puts money in GMX now?"
While everyone is hotly discussing Bitcoin hitting new highs, Pumpfun about to issue tokens, and ETH straightening its back... The market may no longer care about GMX.
The former 'on-chain Perp DEX overlord' has been marginalized.
In the crypto market, where memory is short and attention is scarce, being overlooked is the greatest punishment. This theft took not just $42 million but also GMX's former glory.
Recalling past glory
The newcomers entering this cycle may not have even heard of GMX.
Looking back at GMX's peak, this decentralized perpetual contract exchange (Perp DEX) was once a shining star in the on-chain trading field, and it wouldn’t be an exaggeration to call it 'the Hyperliquid of the last cycle.'
In September 2021, GMX launched on the Arbitrum network and quickly stood out with its innovative multi-asset liquidity pool, GLP. The GLP pool integrated multiple assets such as USDC, DAI, WBTC, and WETH, supporting up to 100x leverage trading, attracting a large number of users and capital.
Between 2022 and 2023, GMX's cumulative trading volume soared to $277 billion, with an average daily trading volume of $923 million. Data from DefiLlama shows its TVL peaked at nearly $700 million in May 2023, once accounting for about 15% of the total locked value on the Arbitrum network, securing the top position among on-chain Perp DEXs.
At that time, GMX was doing quite well in terms of technical breakthroughs and economic incentives.
Its vAMM mechanism eliminated the complexity of traditional order books and also expanded cross-chain to Avalanche (early 2022) and Solana (March 2025), with a cumulative user base exceeding 700,000.
At that time, GMX token stakers could earn 30% of protocol fees (paid in ETH or AVAX), along with esGMX and Multiplier Points (MP) rewards, with APR peaking at 100%. In 2022, the quantity of GMX staked in the protocol accounted for more than 30% of the circulating supply, effectively alleviating selling pressure.
Former on-chain contract products did not have the widespread participation and acceptance like today’s on-chain memes; they attracted more professional DeFi players and those who felt distrustful of CEX, making GMX's past success quite remarkable.
As a result, more DEXs that emerged later in their white papers and promotional materials often compared themselves to GMX, explaining what optimizations they made to outperform GMX in experience or yield, reminiscent of how various competitors compare themselves to Tesla and Apple at press conferences.
New king Hyperliquid, the change of the regime
From the chart below, it is clear that GMX's asset management scale on Arbitrum has shown a rapid decline since the end of 2023, with data around 30-40 million by April, far from its peak.
This decline in timing coincides perfectly with the rise of Hyperliquid.
Hyperliquid represents the new king. The platform uses an order book mechanism, replacing traditional vAMM, significantly reducing slippage and price manipulation risks. On-chain degens are most sensitive to experience and yield; even slight increases in experience and yield can lead to gradual voting with their feet.
For instance, in the last week of 2023, among the trading volume comparisons of all on-chain DEXs, Hyperliquid's trading volume quietly reached $3.5 billion, while GMX only had $1.1 billion.
In other words, it’s not just GMX; all similar DEX businesses have been impacted by Hyperliquid. The data charts clearly validate this: after the end of 2024, Hyperliquid almost consumed the on-chain Perp DEX market with an absolute market share advantage.
Broadly speaking, the DeFi boom from 2021 to 2022 propelled GMX's rapid growth, but during the same period, many VCs began investing in on-chain infrastructure, and products with lower transaction fees and higher performance appeared in large numbers, leading to cutthroat competition among on-chain DEXs.
Moreover, with the flourishing of numerous chains at that time, there were actually representative DEXs on different chains, such as Jupiter on Solana. Despite GMX's cross-chain capability, it also meant it had to compete with native DEXs on different chains, leading to a natural erosion of market share due to multi-front battles.
The new king is gradually establishing itself, and GMX's decline may have already been a trend; it was only the recent hacker attack that brought it back into the spotlight.
The reign is not eternal
The decline of GMX is not an isolated case but another footnote to the rapid turnover of projects in the crypto market.
In the last cycle, you saw various chain games, like the once-popular StepN; where are they now? If this example raises suspicions of project creators actively unloading, then many projects that haven’t issued tokens or polished their products sometimes haven’t really done much wrong yet are still abandoned by the times.
For example, two years ago, there were on-chain wallets emphasizing MPC and full-chain for better experiences and features, and when OKX Wallet and Binance Alpha bound their own entrances, these similar competitors had already vanished without a trace.
Uniswap was once the benchmark for DEX, but at that time, with the rise of SushiSwap and Curve, its market dominance was also shaking; Aave and Compound were also gradually iterating but faced challenges from emerging lending protocols.
In the crypto industry, product experience is not the only moat; speculation drives liquidity, which can collapse a moat at any time.
Once a certain narrative ignites a track, you can see projects rise like feudal lords, all vying for the supreme position on the throne; but the cycles of rise and fall repeat, and looking back, the only constant is BTC.
The reign of the crypto market is not eternal; attention is power, and GMX's silence may be the best proof.
Data sources used in this article:
GMX Data Dashboard
DEX Comparison Data Dashboard
Defillama Data
