Introduction: Why These Three Projects Matter

If you want to understand advanced DeFi, you must study the projects that changed the industry.

• OlympusDAO introduced a new token model that influenced thousands of forks.

• Curve Wars changed how protocols fight for liquidity and incentives.

• GMX created a new category of “real yield” at a time when most DeFi returns were unsustainable.

  
  

These are not just historical examples — they define how tokenomics, incentives, and liquidity engineering work today.

This article breaks each one down in a simple, story-based way.

1. OlympusDAO: Understanding the Bonding & Rebase Experiment

OlympusDAO (OHM) launched a radical idea in 2021:“What if the protocol itself owned its liquidity instead of renting it?”

Why This Was Important

Most DeFi projects rely on liquidity providers (LPs).When rewards stop, LPs leave. Prices crash. Liquidity dries up.

OlympusDAO tried to solve this with a concept called:

How It Worked

Instead of paying people to provide liquidity, OlympusDAO asked users to sell liquidity to the protocol.

This was done through bonding:

• Users deposit assets like DAI or LP tokens

• They receive discounted OHM over time

• The protocol accumulates the deposited assets

  
  

This made Olympus own almost all of its liquidity pools.

The Rebase System

OHM had a “rebase” token model:

• Supply expanded regularly

• New OHM was given to stakers as staking rewards

• APYs were extremely high during peak (thousands of %)

  
  

Why It Boomed

People saw:

• Huge APYs

• Strong liquidity

• Viral marketing (“3,3” meme)

At one point, OHM became one of the fastest-growing experiments in crypto.

Why It Crashed

High APYs were not sustainable. New supply diluted holders faster than new demand came in.

Once confidence fell:

• Price dropped

• Bonds became unattractive

• APY became meaningless

• Forks collapsed

• Treasury value dropped relative to OHM supply

  
  

What Analysts Should Learn

OlympusDAO teaches one of the most important tokenomics lessons:

But it also introduced a powerful innovation:

2. The Curve Wars: Liquidity & Incentives Turned Into a Battlefield

Curve Finance is a DEX specialized in stablecoins. Its genius lies in its incentive model.

Curve launched a token called CRV.Users could lock CRV into veCRV (“vote-escrowed CRV”) for up to 4 years.

The longer they locked:

• The more voting power they got

• The bigger their trading fee boost

• The more CRV emissions they controlled

  
  

This created a system where votes = money.

Why Protocols Wanted Votes

Protocols with stablecoins (Frax, MIM, LUSD, etc.) needed liquidity. More liquidity = more users = higher stability.

Curve allowed veCRV holders to vote on which pools received more CRV rewards.

This led to something new:

The Players

1. Convex Finance (CVX) – aggregated CRV and veCRV votes

2. Frax – built a stablecoin backed by Curve incentives

3. Yearn – battled for yield

4. Hundreds of DAOs – paying for votes to increase liquidity

5. 
   

This was an entire war for influence called:

Convex’s Role

Users could stake CRV on Convex, and Convex would:

• Lock the CRV as veCRV

• Pool all voting power

• Use it to direct CRV emissions

• Earn bribes from protocols

• Share rewards with users

  
  

Convex became the kingmaker:

• Over 45% of Curve governance at its peak

• Controlled which stablecoins became dominant

  
  

What Analysts Should Learn

The Curve Wars proved:

It also introduced:

• Vote-escrow tokenomics (veTokens)

• Bribe markets

• Long-term locking incentives

• Protocol-to-protocol wars for liquidity

  
  

These innovations shaped modern DeFi tokenomics.

3. GMX: The Birth of the Real Yield Narrative

During the bull run, APYs were inflated and unsustainable. Most tokens gave yield through dilution (printing more tokens).

GMX changed the story.

What GMX Is

GMX is a decentralized perpetual futures exchange on Arbitrum & Avalanche. It lets traders open:

• Longs

• Shorts

• Leveraged positions

  
  

The important part: GMX pays revenue to token holders from real fees — not token emissions.

This is called real yield.

Two Main Tokens

• GMX (governance token) – earns 30% of protocol fees

• GLP (liquidity provider token) – earns 70% of protocol fees

Fees are paid in:

• ETH (on Arbitrum)

• AVAX (on Avalanche)

  
  

This was revolutionary because yield came from actual trading activity, not inflation.

Why GMX Became So Big

• Perp trading volume exploded during the 2022 bear market

• Traders generated millions in fees

• Holders earned ETH/AVAX passively

• GLP was profitable when traders lost (house model)

• GMX positions were oracle-secured to reduce manipulation

  
  

What Analysts Should Learn

GMX proved that:

Its model changed how analysts evaluate:

• Token supply

• Incentive sustainability

• Revenue sharing

• Protocol value capture

Today, many protocols try to copy the GMX real-yield model.

Final Comparison Table

Conclusion: Why These Case Studies Matter

OlympusDAO, Curve Wars, and GMX are three of the most important real-world examples in DeFi history.

• OlympusDAO teaches how powerful — and dangerous — token inflation can be.

  
  

• Curve Wars prove that liquidity is political and protocols will compete fiercely for it.

  
  

• GMX shows that real yield and sustainable revenue can win long-term.

Together, they give students a deep understanding of:

• Tokenomics

• Governance

• Liquidity

• Incentive engineering

• Real revenue vs fake APY

• Why DeFi succeeds or collapses

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If you understand these three case studies, you understand the core of advanced DeFi mechanics.