GNS Token

The Gains Network Token (GNS) is a critical component of the gTrade protocol, powering the ecosystem's trading and liquidity efficiency. As a deflationary token, GNS has demonstrated a net decrease in its total supply over time.

In addition to enabling trading on gTrade, GNS supports the stability of the “gDAI Vault” by providing rewards to GNS / DAI liquidity providers, NFT bots, and affiliates. These rewards help to maintain over-collateralization in the vault, reducing the risk of drawdowns.

When the “gDAI Vault” becomes sufficiently over-collateralized, a portion of the GNS supply is burned to counteract inflation from GNS / DAI liquidity and NFT bot rewards. This burning mechanism helps to ensure that the supply of GNS remains scarce and valuable.

GNS token also serves as a backstop for successful traders on gTrade, as it can be minted to re-collateralize the “gDAI Vault”, with a maximum inflation rate of 18.25% per year. Over 20% of the GNS supply has already been burned through organic deflation generated by gTrade.

GTrade

GTrade is Gains Network's flagship product, offering a diverse selection of assets to trade, including cryptocurrencies, forex, stocks, commodities, and indices. The platform boasts a high level of versatility, with traders able to use leverages ranging from 150x for cryptocurrencies to 1,000x for forex, 50x for stocks, and 35x for indices (as of February, 2023).

With 45 crypto pairs, 17 forex pairs, 23 US stock pairs, 4 US indices pairs, and 2 commodity pairs, gTrade's asset offerings are comprehensive. Trades are conducted exclusively with the stablecoin gDAI, and can be initiated directly from a MetaMask wallet on either the Arbitrum One or Polygon Network. To start trading, users require a minimum of 50 USD in gDAI and a small amount of either MATIC or ETH to cover gas fees.

Trading on gTrade occurs within a single pool called the “gDAI Vault”, which provides the liquidity needed for trades. Liquidity providers receive a share of the platform fees, with gTrade distributing 70% of these fees to providers, in a similar fashion to GMX. Regardless of the trading pair, gDAI is used as collateral, with synthetic leverage being backed by the “gDAI Vault”. When trades result in a profit, gDAI is withdrawn from the vault to pay these profits, while trades that result in a loss see gDAI added to the vault.

GTrade's One-Click Trading (1CT) feature offers a quick and efficient method of trading. By using a 1CT wallet and trade delegation, users can complete trades more rapidly without the need to interact with a wallet each time. The 1CT wallet serves as a specific wallet for submitting trading transactions, and can be established by creating a 4-digit PIN and signing a message with a personal wallet. An encrypted key pair is generated, which can be retrieved using the PIN and personal signature if required. Trade delegation, on the other hand, permits one wallet to execute trades on behalf of another. The delegated wallet only requires sufficient funds for the transaction and does not need collateral or profits, as these are connected to the personal wallet.

Gains Network NFTs

Gains Network has a selection of Non-Fungible Tokens (NFTs) that offer a unique way to increase rewards for Liquidity Providers (LPs) or Sing

le-Sided Staking (SSS) by up to 13%. These NFTs can be moved between the Polygon and Arbitrum platforms, and users who own them can utilize an NFT bot on the gTrade platform in exchange for GNS. Through GNS Single-Sided Staking, users can earn DAI rewards by staking their GNS without causing any inflation of the GNS supply. The rewards are based on trading fees redirected to this staking program, including 40% of market order fees (0.08%), 15% of limit order fees (0.08%), and 40% of trade closing fees (0.06%).

LP tokens represent a user's share of a liquidity pool and can be redeemed for the original tokens. Gains Network's NFTs provide exclusive benefits, including reduced spreads when trading. There are five types of NFTs, each with a different level of spread reduction, ranging from -15% (Bronze) to -35% (Diamond). The NFTs are limited in supply, with a total of 1,500 divided into five categories, each with a different supply, LP / SSS boost, and spread reduction. These NFTs can be purchased on OpenSea.

Referrals

Gains Network offers a referral program as part of its gTrade platform, which rewards users with GNS for referring new users to the platform. Through the referral program, GNS has achieved its all-time high (ATH) price.

Vault

• The “gDAI Vault” is a tokenized yield-bearing vault that serves as the foundation of the gTrade platform. It provides liquidity for all trades on the platform, which includes over 70 different asset pairs. The current Total Value Locked (TVL) is 13,592,883 DAI on Polygon and 29,472,273 DAI on Arbitrum.
• Trading profits are paid out by the vault, while trading losses are paid into the vault. A portion of the trading fees is also paid into the vault and split among the gDAI shares, incentivizing stakers to remain in the vault.
• The health of the vault is dependent on trader PnL. As long as the fees earned are greater than the PnL payouts, stakers earn a positive return. The protocol has risk management measures in place to maintain its stability. If the overall PnL becomes negative, the vault builds a buffer with these funds to protect stakers' funds and the protocol from future PnL irregularities.
• The “gDAI Vault” uses GNS to maintain its stability and secure staker investments. If the vault lacks funds, more GNS will be created and sold to refill the vault. Conversely, if the vault holds too much money, GNS can be sold to the platform for a portion of the excess funds. This helps to balance the amount of GNS in circulation and maintain its value.
• Stakers can contribute their DAI to the vault and receive gDAI in exchange, providing liquidity to the gTrade platform. Stakers receive a percentage of the fees paid by traders on the platform, with the current rate being 18.75% of open / close fees and 2.5% of liquidation fees. The APY offered by the vault for deposits is 14% on Polygon and 15% on Arbitrum.
• Withdrawals follow an epoch system, with each epoch lasting 72 hours. Requests for withdrawals can be made during the first 48 hours of any epoch, but the actual withdrawal must occur during a specific withdrawal epoch. The length of the withdrawal epoch depends on the collateralization ratio of the vault and ranges from 1 to 3 epochs. Stakers must withdraw their assets within the first 48 hours of their assigned withdrawal epoch, or a new request must be submitted.

The new “gDAI Vault” manages the collateralization ratio through the process of minting and burning GNS tokens, which helps maintain the desired collateralization levels and keeps the token value stable.

• Over-collateralized scenario: When the vault is over-collateralized (130% or more of the required amount), it means that it has more than enough funds. In this situation, a percentage of all trading losses are directed into a pool. Users can then sell their GNS over-the-counter (OTC) to this pool. The vault proceeds to buy and burn the GNS tokens, effectively reducing their supply. As a result, the collateralization ratio is maintained within a desired range. The article does not explicitly mention a specific desired range for the collateralization ratio. The desired range could vary depending on the platform's objectives and risk tolerance. The important aspect is that the new” gDAI Vault” can adjust the minting and burning of GNS dynamically to maintain the collateralization ratio within the chosen range, ensuring stability and value for the platform and its users. The percentage of losses directed to the pool can be adjusted depending on the current collateralization ratio, ensuring the vault's collateralization increases at a suitable pace.
• Under-collateralized scenario: When the vault is under-collateralized (100%), it means that it lacks sufficient funds. To address this issue, the vault mints and sells GNS tokens OTC. This process is capped at 0.05% of the total GNS supply every 24 hours (which is equivalent to 18.25% per year). By doing this, the vault refills itself safely while protecting GNS from market sell pressure. The combination of these two mechanisms allows the new “gDAI Vault” to effectively manage the collateralization ratio. By adjusting the minting and burning of GNS based on the current collateralization levels, the vault ensures the stability and value of GNS within the platform's ecosystem.

OTC (Over the Counter)

The OTC Buy window is a feature that allows for a quick and efficient way to replenish the “gDAI Vault” in case of under-funding. Unlike exchange-based purchases, this window sets the price without any slippage or fees. Using the OTC Buy window, DAI can be exchanged for GNS with a daily limit of 0.05% of the total GNS supply. GNS token holders are compensated for the risk they assume, and as the price of GNS rises, the backstop becomes stronger. To increase the value of GNS and support its valuation, a portion of the trading fees is directed to GNS. Furthermore, when the vault is over-collateralized, any net trader losses lead to GNS being burned.

Fee Structure

The fee structure on Gains Network is determined by the value of the trade, which is calculated by multiplying the chosen leverage by the desired trading amount. The rollover fee is the only exception, as it is based on the amount of collateral used.

Several fees apply when trading, including the governance & team fee, the ecosystem fee, the market/limit fee, and the rollover fee. Referrers receive a portion of the governance & team fee as a reward for new users they bring to the platform. During open trades, a funding fee may also be charged or earned.

Fees vary depending on the financial instrument traded. The Gains Network website provides a detailed breakdown of all fees for trading cryptocurrencies, forex, US Stocks, US Indices, and commodities.

It is worth noting that on average, 40% of market order fees and 15% of limit order fees are allocated to GNS staking. As 70% of trades are market orders, 32.5% of all order fees go towards GNS staking, which is distributed in a decentralized manner to the team, project fund, liquidity providers, GNS stakers, affiliates, and NFT holders executing limit orders and liquidations.

Oracles

GTrade employs a Decentralized Oracle Network (DON) to ensure reliable and precise pricing for its leveraged trading products. Unlike other derivatives platforms, gTrade doesn't generate its own prices. Instead, it leverages a combination of Chainlink Price Feeds and its own DON to obtain the median spot price for each trading order. The DON retrieves the latest prices from 8 Chainlink nodes, which aggregate the median prices from 8 exchange APIs. The aggregator contract filters out outliers and errors, and once a minimum number of accepted prices have been received, it sends the information back to gTrade for trade execution.

This approach guarantees that gTrade's prices are current, accurate, and not subject to liquidations or trade price impact. Moreover, it offers guaranteed stop losses, a crucial feature for traders. By using the median price from 8 exchanges, the platform can prevent "scam wicks." Additionally, comparing the DON prices with Chainlink Price Feeds ensures that the prices are reliable and trustworthy.

Permissionless

Gains Network is accessible to anyone, without any restrictions or KYC procedures. The gTrade platform functions as a decentralized exchange (DEX) without any central authority or controller. All transactions are executed on the blockchain via smart contracts, eliminating the need for a third party to handle user funds. As a result, users can access the platform without providing any personal information, making it a completely permissionless platform.

Gains Network's gTrade platform has transformed decentralized leveraged trading by offering a diverse range of assets and leverages to maximize investment returns, while maintaining user-friendliness and efficiency. The platform's real-time Chainlink oracle Network ensures fast and accurate pricing information by collecting data from 8 decentralized exchanges. The “gDAI Vault” mechanism safeguards liquidity and promotes stability by buying and burning GNS as needed. These innovative features have led to a substantial increase in the usage of GNS, making gTrade a must-try platform for traders seeking to maximize their investment returns.

It's crucial to understand that many DeFi trading platforms depend on oracles for referencing spot and futures market prices. However, these prices frequently aren't updated with every trade, resulting in less-than-ideal fill prices. In this regard, gTrade sets itself apart by providing immediate on-chain price updates. By utilizing real spot prices for order execution, gTrade enables a more accurate distribution of funding fees and helps reduce the disparity between long and short open interests. This approach fosters both transparency and fairness in trading.