Gains Network Thread

0/ Let’s take a break from the $BNB $FTT drama and look at @GainsNetwork that reached an ATH volume of $300M!

$GNS is a decentralized leveraged trading protocol that enables users to trade crypto, forex, and stocks for up to 1000x leverage.

Be that as it may, this might be the “safest” revenue generating strategy in a bear market.

Stay tuned for a surprise finding! 🧵

1/ 📖 TL;DR

- Stakers earns 32.5% in revenue from fees 💵

- Synthetic asset

- Price engine runs from Decentralized Oracle Network (different with the usual $LINK price feed)

- Active token burning 🔥

2/ $GNS is a decentralized synthetic trading platform with low fees and high tx speed. Built on $MATIC chain and moving to @arbitrum soon

3/ First of all, how does the gTrade platform work? confused

- Allows users to trade from their wallet

- The trading engine is powered by $LINK’s price oracle - Decentralized Oracle Network (DON)

- High liquidity ⚡ & low price 📉 impacts thanks to being synthetic

- No order books or required liquidity

4/ As a result the gTrade is remarkably efficient in handling trades. With only ~$110M in market cap, but able to generate $330M+ in volume on 13th Oct 2022. To date, the volume has reached $19B+ with 79% crypto 20% forex 0.1% stocks contribution. 📊

5/ Trades are opened with $DAI as collateral regardless of the pair, it allows the protocol to be 50x more capital efficient.⚡

More details on trading pairs (https://gains-network.gitbook.io/docs-home/gtrade-leveraged-trading/pair-list)

6/ gTrade applies a relatively small fee schedule to minimize High-Frequency Trading (HFT)/Quants to exploit the nature of synthetic assets (crypto 0.16% stocks 0.24% forex 0.016%). 32.5% of which in total are distributed to stakers of $GNS.

7/ When a trade is opened $DAI is sent to the DAI vault as collateral. Then when the user closes the trade, one of the two things will happen:

➕ if PNL is positive, DAI is taken from the vault to pay the trader

➖ conversely, the vault receives DAI if the P&L is negative

8/ Continuing from the vault, there are 3 pools at the heart of Gains Network:

1. $GNS Staking

2. $DAI vault

3. GNS/DAI LP

9/ $GNS Staking

Staking GNS tokens would reward users from fees generated in trading. 40% of market orders and 15% of limit orders are allocated here, given @GainsNetwork claims that 70% are market orders.

In short, 32.5% of fees from all orders will go to stakers.

10/ To further enhance user’s reward, $GNS employs utility NFTs without any locking mechanism currently.

%%pic of NFT schedule from here https://gains-network.gitbook.io/docs-home/liquidity-farming-pools/gns-staking%%

11/ $DAI Vault

is the core of the protocol, in which trader’s DAI goes here. The vault consists of staked DAI value + the platform’s aggregate PnL. Stakers are only allowed to withdraw a max 25% of total holding every 24 h to mitigate bank runs. In doing so, the reward is 15% of LP rewards.

https://twitter.com/GainsNetwork_io/status/1524161426096545792

12/ cont.

The vault is set to stay overcollateralized at 30%. Meaning that, if the

(Staked DAI Value + Platform PnL) / Staked $DAI Value > 130%

the vault will use the extra DAI to buy $GNS and burn it

13/ $GNS/$DAI Pool

is the usual LP pools present in most similar projects.

- $GNS and $dQUICK as rewards (earn both rewards from the protocol and @QuickswapDEX)

- Rewards come from fees generated (separate from $GNS Staking)

- Yield depends on trading volume

14/ State of Gains Network

GNS was initially called GFarm2 with an initial supply of 31.02M. Currently, the network has 30.24M supply in circulation including GFarrm2. 73% of which are currently being staked in the $GNS pool.

15/ With a high staked TVL to MCap ratio, concerns are raised whether it is truly decentralized. The chart below provides the answer for just that; with the highest accumulator only owning 7% of the total in circulation.

16/ The protocol experienced an ATH in volume on 13th October 2022. Surprisingly, this volume is made up of mostly forex trades, which begs the question; is GNS starting to receive exposure from non-crypto markets? 🤔

17/ Team

The team has not been properly doxxed, but we are only given knowledge of the roles they hold. A brief research through Reddit, comes up is that Seb (the founder) is based in Europe and he is the only developer in the team.

https://www.reddit.com/r/GainsNetwork/comments/rps38j/team_behind_gains_network/

18/ Audit

@GainsNetwork has been thoroughly audited by CertiK with a score of 87/100.

https://www.certik.com/projects/gains-network

19/ Now what does Gains Network have in store for the future?

1. Gains plans to create a DAO when the protocol is more developed, just like others before it 😃

2. The protocol is planning to be fully decentralized by hosting in IPFS 👥(https://gainsnetwork-io.medium.com/a-decentralized-frontend-gtrade-migrates-to-ipfs-e0bbc59eaf8b)

3. Gains is also planning to move into @arbitrum, which has a $1.6B+ potential

20/ If Gains could migrate to @arbitrum, it would provide sufficient market participants to be on par with $GMX. As you can see from the comparison below

21/ That said, there are still limitations and concerns for the network:😨

- DAI Vault withdrawal capped at 25%/day

- Minimum position size is 1,500 DAI -> could be settled by using higher leverage

- Only 3 open trades per wallet

- Max collateral 75,000 $DAI

- Winning percentage capped at 900% for each collateral

22/ Some of you might also be concerned regarding the preciseness of #synthetic assets. Most protocols use $LINK price feed but are generally updated in the minutes time frame. Not $GNS.

(more detail https://www.reddit.com/r/GainsNetwork/comments/xkf9wq/scamwick_protection_visualized/)

23/ (cont.) Here, each time an order is opened, it makes a request in real time to 8 nodes to the DON. LINK then takes the median and gives it to $GNS. No more scam wicks (goodbye $GMX $AVAX).

Stay Tuned for our next dApp Weekly Spotlight?