Crypto Investor is No. 1 Individual Investor in Yield-generating Token
Arthur Hayes, the co-founder and onetime CEO of the centralized derivatives exchange BitMEX, believes that both CeFi and DeFi are here to stay, and he’s putting his money where his mouth is.
To that end, Hayes holds the largest individual stash of GMX tokens, according to Dune Analytics. GMX is a decentralized perpetual contracts exchange and the largest protocol on the Arbitrum with $453M worth of assets locked, according to DeFi Llama. In the last 24 hours, it’s skyrocketed more than 53%.
‘I Like This Token’
“GMX is the 2nd largest DeFi derivatives platform by trading volume,” Hayes said in an exclusive interview with The Defiant. “Most importantly, the tokenomics offer an attractive yield, which is another reason why I like this token for my portfolio.”
Speaking more broadly, Hayes said centralized and decentralized exchanges are beginning to “bifurcate,” providing specialized products to separate user bases.
“On CeFi platforms, we trust exchanges to safeguard our assets, whereas in DeFi, traders always control their collateral usage,” he said.
Hayes said his portfolio is weighted towards derivatives trading platforms, asserting they boast a superior business model to spot exchanges.
“Clients always pay for leverage,” he said. “That’s why, when I set out to create my own crypto trading platform in 2014, I focused on derivatives. And it’s also why, when I started exploring how to get meaningful exposure to DeFi in 2022, I went the derivatives route then, too.”
As an investor, Hayes said he hopes to profit from the growth of both centralized and decentralized trading venues.
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“I have a large stake in BitMEX, and I also want to have exposure to what I believe will be a leading DeFi derivatives trading platform,” he said.
Hayes, a former Citigroup and Deutsche Bank trader, has become a prime influencer in the cryptocurrency market. He has the air of the outlaw after pleading guilty to violating a U.S. banking law in connection with his management of BitMEX.
Mashup
With around 400,000 followers on Twitter and Medium, Hayes’ writings have become a lodestar for young crypto traders. His posts tend to be a mashup of philosophical musings and market observations, with a dash of his high-octane pursuits thrown in for good measure. In a recent post entitled “Be Present”, Hayes described his love of skiing.
“There is nothing like a snorkel sesh in deep powder,” he wrote. “Take a densely packed forest, add a steep pitch, and throw in a couple feet of fresh snow, and I’m in heaven. But, while that setup brings me pure joy, it is not without risk.”
As for GMX, Hayes’ wallet ranks as the fourth-largest with 200,580.22 tokens, worth more than $14M. The top GMX holder is the cross-chain bridge Synapse, followed by the GMX/WETH pool on Uniswap, and a GMX wallet holding vested tokens.
For comparison, Binance, the leading centralized exchange by volume, holds nearly 195,000 GMX on behalf of all of its customers.
GMX defied the 2022 bear market as one of the projects offering “real yield” to users in exchange for locking up their native token.
Unlike the unsustainable and inflationary yield offerings that drove DeFi’s bull market in 2021 and 2022, protocols offering real yields allow users to claim a share of protocol revenues, often in the form of established assets like ETH or USDC as staking rewards.
I have a large stake in BitMEX, and I also want to have exposure to what I believe will be a leading DeFi derivatives trading platform.
Arthur Hayes
GMX offers annual returns of 8% to stakers, with rewards paid out in the form of Wrapped Ether and GMX.
GMX experienced heavy volatility last year. The token rocketed from $12 in September 2021 to $58 in January 2022, before crashing back to $12 in June of last year, according to CoinGecko.
But GMX is up 500% over the past seven months. The token last changed hands for $70 after posting an all-time high of $77 on Feb. 4
Hayes purchased the tokens between March 3, 2022 and Sept. 7, 2022 at an average price of $28.5. Hayes also claimed around $1.4M worth of rewards from his nearly $14M stockpile of GMX, meaning he appears to be sitting on an unrealized gain of $9.3M.