The collapse of centralized crypto giants like FTX and ongoing regulatory scrutiny of Binance have shifted investor focus toward decentralized alternatives—particularly on-chain perpetual contract platforms. Unlike many projects that rely solely on token emissions to drive growth, leading decentralized exchanges (DEXs) generate real revenue through trading fees, giving them stronger fundamentals. This makes them especially attractive during bear markets and periods of macro uncertainty.
In 2025, the top players in the on-chain derivatives space—dYdX and GMX—have seen their tokens outperform Ethereum significantly. Since January 1st, both $DYDX and $GMX have delivered double-digit gains, outpacing $ETH’s +58% rise. With upcoming protocol upgrades and structural improvements, this sector is poised for further momentum. Let’s dive into what’s changing, what’s coming, and why these platforms are becoming key holdings in smart DeFi portfolios.
dYdX: A Veteran Platform Reinventing Itself
Why dYdX Stands Out
dYdX remains the largest on-chain perpetual exchange by trading volume, processing 3–4x more activity than its closest competitor, GMX. Despite this dominance, its token ($DYDX) ranks second in market capitalization—highlighting a disconnect between usage and valuation that could present an opportunity.
Key highlights:
- $DYDX is up +120% year-to-date.
- Built on StarkEx, an Ethereum Layer 2 using validium technology for high-speed orderbook-style trading.
- Backed by top-tier investors including a16z and Paradigm.
- Combines the security of decentralization with the user experience of centralized exchanges.
Historically, however, $DYDX has struggled with weak tokenomics. While the protocol generates substantial fee revenue—estimated at **$110 million annually** based on 30-day trailing data from Token Terminal—none of it was directly distributed to token holders. Instead, growth was fueled by aggressive token incentives, leading to continuous selling pressure.
Compare this to GMX, where 30% of fees go directly to $GMX stakers—making it more akin to owning equity in a revenue-generating business.
The V4 Upgrade: Turning Revenue Into Value
To address long-standing concerns, dYdX is undergoing a major transformation with its V4 upgrade, set for rollout in Q3 2025. This shift includes a fundamental redesign of its economic model:
- Fee distribution to validators: Trading fees will be shared with network participants who stake $DYDX.
- Mandatory staking for node operation: Running a validator requires locking up $DYDX, creating structural demand.
This transition turns dYdX from a usage-driven protocol into one with real yield potential for token holders. With a current market cap of around $400 million** and projected annual revenue exceeding **$100 million, the asset appears undervalued—if the upgrade delivers as planned.
However, execution risk remains. Originally slated for late 2022, then pushed to Q2 2025, the latest timeline targets September 2025. Past delays suggest caution is warranted.
Additionally, there’s a looming supply overhang: over 100 million unclaimed $DYDX tokens are scheduled to unlock by December 2025, increasing circulating supply from 250 million to 400 million. This could create short-term downward pressure unless offset by strong demand.
GMX: The Bear Market Builder That Rose to the Top
The Rise of a DeFi Powerhouse
GMX emerged during the 2022–2023 bear market as one of the most resilient and innovative on-chain derivatives platforms. Today, it holds the top spot in market cap among decentralized perpetual exchanges and ranks second in trading volume.
Key metrics:
- $GMX up +89% YTD.
- Dominant on Arbitrum, with growing presence on Avalanche.
- Dual-token model: $GMX** (governance + fee share) and **$GLP (liquidity provider token acting as counterparty).
The system works by allowing users to open leveraged positions while GLP holders serve as the counterparty, earning 70% of trading fees. In return, $GMX stakers receive 30% of fees—creating a sustainable yield loop.
But this model isn’t without flaws.
Addressing GLP’s Limitations with V2
One major constraint of GMX V1 is the bundled nature of GLP, which pools assets like ETH, BTC, and stablecoins. This creates two risks:
- Limited tradable assets: Only coins included in GLP can be traded.
- Cross-asset contagion: A sharp move or manipulation in one asset (e.g., a small-cap altcoin) can impact the entire GLP basket.
GMX V2 aims to solve this by:
- Decoupling counterparties per asset, eliminating shared risk exposure.
- Expanding supported markets, potentially enabling trading for tokens not yet listed on Binance Futures.
- Improving capital efficiency and risk isolation across markets.
These changes make GMX safer, more scalable, and capable of capturing long-tail trading demand—an edge in a fragmented derivatives landscape.
Arbitrum Airdrop Windfall: Fueling Future Growth
Another tailwind for GMX is its 8 million ARB token allocation from the Arbitrum airdrop, valued at approximately $10 million at current prices. This windfall gives the treasury significant flexibility to:
- Distribute rewards to $GMX or $GLP holders.
- Fund integrations with complementary protocols.
- Sponsor ecosystem development and liquidity initiatives.
Discussions within the community are ongoing, but any decision will likely align with sustainable, organic growth—a hallmark of GMX’s strategy since inception.
Similar models have succeeded on Avalanche and Optimism, where protocol-owned liquidity boosted TVL and trading activity. If GMX deploys its ARB wisely, it could trigger a similar flywheel effect.
Core Keywords Driving This Narrative
This analysis revolves around several high-intent SEO keywords that reflect growing search interest:
- on-chain perpetual exchange
- decentralized derivatives platform
- dYdX V4 upgrade
- GMX V2 roadmap
- DeFi tokenomics
- yield-generating crypto protocols
- blockchain futures trading
- real yield DeFi projects
These terms naturally appear throughout the discussion, aligning with user intent while avoiding forced repetition.
Frequently Asked Questions
Q: Why are on-chain derivatives exchanges gaining popularity now?
A: After repeated failures of centralized platforms (FTX, Mt. Gox), users are prioritizing self-custody and transparency. On-chain exchanges offer non-custodial trading with verifiable reserves and open-source code—key advantages in a trust-scarce environment.
Q: How does dYdX compare to GMX in terms of revenue sharing?
A: Currently, GMX offers better incentives: 30% of fees go to $GMX stakers. dYdX historically returned nothing to holders—but that changes with V4, when fee sharing with stakers becomes core to its model.
Q: Is $DYDX undervalued relative to its revenue?
A: On paper, yes. With ~$110M annualized revenue and a $400M market cap, dYdX trades at a low revenue multiple compared to traditional software or even other DeFi protocols. But valuation depends on successful V4 execution and managing token unlocks.
Q: What risks does GMX face with its V2 upgrade?
A: The main risk is complexity. Decoupling counterparties per asset increases operational overhead and requires robust risk management. However, if implemented well, it significantly improves scalability and safety.
Q: Can decentralized exchanges ever match the speed of centralized ones?
A: Yes—especially with L2 solutions like Arbitrum and Starknet. dYdX already offers orderbook-based trading with sub-second latency, proving that decentralization doesn’t mean sacrificing performance.
Q: Where can I trade $DYDX or $GMX safely?
A: Both tokens are available on major regulated exchanges and decentralized platforms. Always verify contract addresses and use trusted wallets when interacting directly with DeFi protocols.
The future of derivatives trading is increasingly moving on-chain—not just for ideology, but for resilience, transparency, and real economic returns.
👉 Stay ahead of the next wave of DeFi innovation—explore where decentralized trading is headed next.