GMX introduced a novel approach to perpetual DEXes: the GLP pool model that offers “real yield” from trading fees rather than token emissions.
The GLP Model
GLP is a multi-asset liquidity pool:
- Contains ETH, BTC, USDC, and other assets
- Acts as counterparty to all trades
- Earns 70% of platform fees
- Profits when traders lose (and vice versa)
Real Yield
Unlike “paper yield” from token emissions:
- Fees paid in ETH/AVAX (not GMX tokens)
- Sustainable yield from actual usage
- No dilution from emissions
Key Takeaways
- GLP model aligns LPs as counterparties to traders
- Real yield from fees, not token emissions
- Sustainable model as long as trading continues
- Risk: LPs lose when traders consistently win