Gains Network AMA with CRE8R DAO
Primer: Gains Network is a decentralized leverage trading platform. Their goal is to create gains for traders, LPs, and investors. In this AMA hosted by CRE8R DAO, Seb of Gains Network takes us through the history of their protocol (rebranded from Gains Farm), their features, and what’s coming up next for them.
Gains Network In A Nutshell
A suite of DeFi products
Currently building on Polygon
Their first product is gTrade, a decentralized leverage trading platform
Has a unique architecture that makes them competitive
Migration From Ethereum Mainnet To Polygon
A year ago, they had a basic version of their platform running on Ethereum mainnet
Realized that opening or closing a trade would have a huge cost, even before the high gas fee season
“So to open a trade or to close a trade, it costs something like $100 of ETH. It was even before the crazy high gas fees.”
- Seb
Did some research and went ahead with Polygon
Polygon is developing secure rollup solutions. The solution using recursive proofs looked interesting to him
Their Tokens
GFARM2 was their initial token on Ethereum
They bridged their token to Polygon and did a rebrand from Gains Farm to Gains Network
Decided to issue a new token called GNS token, which is a 1:1000 token split from GFARM2
The GNS token is needed to mint and burn on their platform
If a trader wins a trade, the platform will mint some GNS tokens. If they lose, some tokens would be burnt
As most traders lose, the burns will make the token deflationary
In 1 year, they have burnt more than 20% of the supply already
GNS token could be staked to earn fees
Current APY is around 80%. For a long time, it was above 100%
TVL has grown from 2 million to 20 million currently
Single sided staking for GNS will be coming in the next few months. Currently, LPs have to pair it with DAI
Why Did They Call Themselves Gains?
Because that’s the goal for everyone — traders, LPs, investors
“Maybe it's because you guys are called Gains. So they come to you guys for the gains.”
- Fugu
Initially, they were called Gains Farm because liquidity is a core part of their protocol. Rebranded because it was associated with inflationary farms
Integrating NFTs Into Their Trading Platform
Were distributed fairly early on Ethereum
Have 3 use cases:
Stake them in the liquidity pool to boost APY for LPs
Reduce the spread if you are a trader
Allow holders to execute limit orders
Have different ranks for their NFTs, with higher ranks providing better benefits
Have recently redone the artwork for the NFTs. Will be issuing new NFTs with the artwork embedded in them
Their Custom-Made Real-Time Oracle
Most projects integrating Chainlink use their default fields
On Polygon, where gas is cheaper, the prices are updated every few minutes
However, for a decentralized leverage trading platform, this is too much of a delay. Hence, they need their own architecture
When a trade is made on the platform, it makes an on-demand request to their Chainlink oracle network. The nodes will respond with the median price across 7 exchanges
Other leverage protocols generate their own prices through orderbooks while theirs is based on spot prices
Their Advantages Over Other Platforms Like dYdX And GMX
2 categories of decentralized leverage trading platform:
Those that generate their own prices by building liquidity for each pair in the orderbooks (e.g. dYdX, etc.)
Synthetic trading (e.g. GMX)
GMX is closer to Gains Network
They use the GNS token for every trade on the platform. GNS token is an asset agnostic synthetic
They only need to build a single liquidity pool. When a new token gets released, they just need the API to list it
In contrast, GMX is less liquidity efficient as they need liquidity for each token pair that they offer
How Do Assets Get Listed On Their Platform?
Currently, there’s no proper Snapshot vote to add assets to the platform
What the team currently does is to ask the community what new features they would like to see
Their plan is to transition to community governance within 1 year
Features For Advanced Traders
Traders can add any amount of indicators that they want. They have a custom integration with TradingView
Is continuously working on improving the frontend
Will They Have Their Own Fiat On-Ramp/Off-Ramps?
It’s not something they are focusing on
Are There Any Plans For Mobile Integration?
The website is fully responsive and it works on phones as well
Already have quite a number of traders trading on their phones
Chat Function
Released a chat on their trading page where traders are able to share trade ideas
Have a few moderators moderating the chat
Traders can chat anonymously
Currently have a trading contest running from 7 Jan to 7 Feb. The top 1000 traders on the platform will win prizes
How Do Liquidations Work On Their Platform?
Anyone with their NFT can execute liquidations
Their liquidation threshold is at -90% profit, which is lower than other platforms
The liquidator will get 5% of the collateral
What Are Their Trading Fees Right Now?
0.06% per trade (0.08% if limit order)
Their dashboard is accessible at gains.trade/stats
A share of the protocol revenue goes back to the project fund to be re-invested and the team
The NFTs earn 5% of the liquidations and 0.02% of every order they execute
The GNS-DAI liquidity pool receives 0.06% of all closed trades and 5% of the liquidations
What Do Traders Need To Have Before They Trade?
They would need some DAI and MATIC
Transactions stay relatively cheap because they are on Polygon
Opening/closing a trade would cost 0.5 MATIC
Opportunities For LPs
Besides the GNS-DAI pool, they also have a DAI vault
The DAI vault is important to their trading architecture as it balances the minting/burning of GNS tokens when trades are executed on their platform
Offers one of the highest APY for DAI
Thinks that risk for staking in the DAI vault is pretty low as the vault is backed by the GNS-DAI pool
Have been audited 6 times by CertiK and they run unit tests on their code before deploying them
Their Referral System
Traders can pass their referral link to their friends/community
Every time someone makes a trade, the referrer will get 0.01% of their position size
Their Roadmap For The Next 3-6 Months And Beyond
For Gains Network V6
Will be implementing a lot of small optimizations
The next largest implementation is a guaranteed stop process (i.e. if the price goes below your stop-loss and transactions don’t go through on Polygon due to congestion, it will still be executed at the price traders have set)
Will be optimizing their NFTs
For Gains Network V7
Remove partial collateral from trade to increase leverage
Add partial collateral to trade to lower leverage
Add partially to an open trade at same leverage (pyramiding)
Exit partially of an open trade at same leverage
Partially take profits and stop losses
Trailing stop losses
Other Updates
Will launch a bug bounty program with Immunefi
Will have a second trading contest after this first round closes
Thinking of partnering with an insurance project for their DAI vault
List stocks, commodities, indices
List cross-pairs between markets (e.g. TSLA/DOGE)
More social trading features
Decentralization of their frontend/website
Single-sided GNS staking
Interested in ZK rollups developed by Polygon
Thinking of a decentralized casino-type game in the future
Current Challenges They Have And How They Plan To Overcome Them
Everything is going well at the moment
Adding new features and finding ways to optimize their platform
Made a conscious decision to focus on marketing as well
Upcoming Events
Their 2nd trading contest
What Are The Next Steps That Listeners Can Take
Join their Telegram group. They have an active community there
For those who want to try trading on their platform, they can go to gains.trade
For those who prefer LPing, they can go to gainsnetwork.io to find their staking pools
All information presented above is for educational purposes only and should not be taken as investment advice. Summaries are prepared by The Reading Ape. While reasonable efforts are made to provide accurate content, any errors in interpreting and summarizing the source material are ours alone. We disclaim any liability associated with the use of our content.