Perpetuals Farming (GMX, etc.) vs Perpetuals Yield Vaults

Capital Efficiency: LPs provide a single-sided liquidity pool (GLP) that backs all trades, earning fees from swaps, leverage trading, and liquidations. This matters for users seeking non-correlated, multi-asset yield derived directly from market activity, not token emissions.

Transparent Risk/Reward: Yield is a direct function of platform volume and open interest. LPs bear the counterparty risk of traders' profits but have clear visibility into the real yield mechanics (e.g., 70% of fees to GLP). This matters for sophisticated users who want to model their risk exposure without intermediary strategies.

Hands-Off Compounding: Vaults (e.g., Pendle, Aevo) automatically manage complex positions—rolling futures, hedging delta, harvesting rewards—into a single yield-bearing token. This matters for users who want set-and-forget yield optimization without active management of expiring contracts or funding rates.

Yield Stacking: Vaults can capture and compound multiple yield streams: perps funding rates, spot-futures basis arbitrage, and protocol token incentives. This matters for maximizing APY in bull markets or when specific assets have persistently high funding rates (e.g., meme coins).

Immediate Liquidity: GLP is a liquid ERC-20 token with deep pools on DEXs. Users can enter/exit positions instantly without waiting for strategy cycles or unlock periods. This matters for large capital deployments (>$100K) where slippage and timing are critical.

Structured Products: Platforms like Pendle offer vaults with defined risk tranches (e.g., principal-protected vs. yield-enhanced). This matters for institutions or cautious investors seeking customizable risk/return profiles beyond a single pool's binary exposure.

Direct exposure to protocol fees: Earn 30% of trading fees and 10% of liquidation bonuses from GMX v2. This matters for users who want transparent, high-yield income directly tied to platform activity, not a vault manager's strategy.

Requires active management and capital efficiency risk: You must stake GLP (Arbitrum) or GM (Avalanche) tokens, whose value fluctuates with the underlying asset pool. This matters for users who want passive, stable yield and are averse to impermanent loss on the liquidity provider side.

Automated, diversified yield strategies: Vaults like Pendle's SY pools or Aevo's staking vaults automatically compound yields and often hedge delta. This matters for users who want hands-off exposure to perp DEX yields without managing LP positions directly.

Smart contract and manager risk: Yield depends on the vault's strategy code and the underlying protocols it integrates (e.g., GMX, Hyperliquid, Synthetix). This matters for users who prioritize minimizing third-party dependencies and prefer to audit a single protocol's contracts.

Direct exposure to trading fees and esGMX rewards: LPs earn 70% of fees from swaps and leveraged trades on GMX v2, with additional incentives in escrowed tokens. This matters for capital-efficient whales and protocols seeking maximum raw yield, accepting higher volatility. APYs can range from 10-30%+ depending on market activity.

Active management of impermanent loss and delta hedging: Vaults like Kelp's rsETH or Pendle's yield-tokenized strategies automatically rebalance exposure and may hedge delta. This matters for institutions and passive investors prioritizing capital preservation over max yield, reducing the direct correlation to trader PnL.