On July 9, the well-established 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 the cross-chain bridge. The GMX team has presented conditions 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 amount, this matter has not sparked widespread discussion among everyone.

A heart-wrenching comment is:

“Who still puts money in GMX now?”

While everyone is talking about Bitcoin reaching new highs again, Pumpfun is about to release its token, and ETH is straightening up… the market may not be concerned about GMX anymore.

The former “on-chain Perp DEX leader” has been marginalized.

In the short-memory, attention-scarce crypto market, the biggest punishment is to go unnoticed. This theft took not only 42 million dollars but also the former glory of GMX.

Recalling the glorious past

The P players entering this cycle may not have even heard of the name GMX.

Looking back at the peak of GMX, this decentralized perpetual contract exchange (Perp DEX) was once a shining star in the on-chain trading space, and it would not be an exaggeration to call it the “Hyperliquid of the last cycle.”

In September 2021, GMX launched on the Arbitrum network and quickly gained prominence with its innovative multi-asset liquidity pool GLP. The GLP pool integrates various assets such as USDC, DAI, WBTC, and WETH, supporting up to 100x leverage trading, attracting a large number of users and funds.

From 2022 to 2023, GMX accumulatedTrading volumeSoared to $277 billion, with an average daily trading volume of $923 million, DefiLlamaData showsIts TVL peaked at nearly $700 million in May 2023, accounting for about 15% of the total locked value on the Arbitrum network, firmly securing the top position among on-chain Perp DEX.

At that time, GMX was doing well in both technological breakthroughs and economic incentives.

Its vAMM mechanism eliminates the complexity of traditional order books and has also cross-chain expanded to Avalanche (early 2022) and Solana (March 2025), with a total of over 700,000 users.

At that time, GMX token stakers could earn 30% of the protocol fees (paid in ETH or AVAX), along with rewards in esGMX and Multiplier Points (MP), with an APR that peaked at 100%. In 2022, the amount of GMX staked in the protocol accounted for over 30% of the circulating supply, effectively alleviating the selling pressure.

The on-chain contract products of the past did not have the widespread participation and acceptance like today’s on-chain memes; they mostly attracted professional DeFi players and those who felt distrustful of CEX. The popularity of GMX was indeed not easy to achieve.

As a result, many DEX that appeared later on the chain would reference GMX in their white papers and promotional materials, explaining what further optimizations they have made, and how they outperform GMX in terms of experience or returns, reminiscent of the way competitors compare themselves to Tesla and Apple at launch events.

The new king Hyperliquid, the world changes

From the image below, it can be clearly seen that GMX’s asset management scale on Arbitrum has shown a rapid decline since the end of 2023, with data around 30-40M by April, which is far from its peak.

And this decline coincides perfectly with the rise of Hyperliquid.

Hyperliquid is the representative of the new king. The platform adopts an order book mechanism, replacing the traditional vAMM, which significantly reduces slippage and the risk of price manipulation. On-chain Degens are the most sensitive to experience and yield; even a slight increase in experience and yield can lead to gradual voting with their feet.

For example, in the last week of 2023, in the comparison of trading volumes of all on-chain DEXs, Hyperliquid’s trading volume has quietly reached 3.5 billion USD, while GMX only had 1.1 billion USD.

Or rather, it’s not just GMX; all similar DEX businesses have been impacted by Hyperliquid. The data chart clearly supports this: after the end of 2024, Hyperliquid has almost taken over the on-chain Perp DEX market with an absolute market share advantage.

Looking at it from a broader perspective, the DeFi boom of 2021-2022 drove the rapid growth of GMX, but it was also during the same period that a large number of VCs began investing in on-chain infrastructure, leading to the emergence of products with lower transaction fees and higher performance, resulting in intense competition among on-chain DEXs.

Moreover, with the emergence of various chains at that time, there are actually representative DEXs on different chains, such as Jupiter on Solana. Although GMX can operate across chains, it also means that it needs to compete with the native DEXs on different chains, resulting in a natural erosion of market share due to multi-line operations.

A new king gradually rises, the landscape changes, the decline of GMX may have been a trend for some time, but it is the recent hacker attacks that have brought it back into the spotlight.

No power is eternal.

The decline of GMX is not an isolated case, but another footnote to the rapid turnover of projects in the cryptocurrency market.

In the last cycle, you saw various blockchain games, like the once-popular StepN, but where are they now? If this example might have some suspicion of the project team actively selling, then for more projects that haven’t issued tokens and are still polishing their products, sometimes they haven’t done much wrong themselves but are still abandoned by the times.

For example, the year before last, there were still on-chain wallets that emphasized better experiences and features such as MPC and full-chain, but after OKX Wallet and Binance Alpha tied their own entry points, similar competitors have long since disappeared.

Uniswap was once the benchmark for DEXs, but at that time, with the rise of SushiSwap and Curve, its market dominance was also shaking; Aave and Compound, although gradually iterating, were also facing challenges from emerging lending protocols.

In the crypto industry, product experience is not the only moat; speculation drives liquidity, which can break down the moat at any time.

After a certain narrative ignites a hot track, you can see projects rising like feudal lords, all vying for the supreme position on the throne; but the rise and fall repeat cyclically, 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.

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