Arbitrum-Based GMX Surpassed Ethereum Blockchain in Daily Fees Over Weekend

Decentralized finance (DeFi) exchange GMX logged fees of over $5 million in a 24-hour period over the weekend – temporarily making it the largest revenue generator in DeFi, ahead of even the Ethereum blockchain.

This added to the $120 million in total fees accrued since September 2021, GMX’s dashboard data shows – which may signal fundamental strength for GMX’s native tokens.

The fees are shared across GMX’s two tokens, gmx and glp. Gmx is the utility and governance token and accrues 30% of the platform's generated fees, while glp is the liquidity provider token that accrues 70% of the platform's generated fees.

Ethereum fees clocked in at $4.7 million over that period. These fees were generated from user actions on Ethereum, such as transactions or issuance of ERC20 tokens.

However, these fees do not include the fees generated by applications on Ethereum itself. Uniswap, for instance, saw upward of $1 million in fees collected from users.

DeFi products like GMX rely on smart contracts to offer users financial services, such as trading and lending. GMX allows users to trade futures, or financial derivatives of spot tokens, on its exchange with leverage of up to 50 times the initial collateral.

GMX features such as low slippage, cheap fees and protection against unwanted liquidations have also contributed to the DEX’s popularity. It locked over $500 million worth of tokens as of Monday, with $455 million on Arbitrum and the remaining on Avalanche.

As such, some crypto Twitter community members said a portion of Friday’s $5 million revenue came as Mechanism Capital founder Andrew Kang closed his multimillion-dollar positions on bitcoin and ether on GMX.

Recent activity on @GMX_IO , including the closing of Andrew Kang's long positions of ETH and BTC, has resulted in a new all-time high for GMX on our Fees Dashboard. In the past 24 hours, GMX reached $5,641,320 in user fees, which is more than double its previous all-time high pic.twitter.com/HqW3ZMdSsL

— DefiLlama.com (@DefiLlama) February 11, 2023

Meanwhile, Ethereum was back to the top spot on Monday with over $3 million in fees generated over a 24-hour period.