Questions:

A war of the trading platforms? GMX (native to Arbitrum) - GNS (native to polygon, but announced will be launching on Arbitrum soon). Both platform native tokens (GMX - GNS) have seen meteoric price growth during a bear market. Since June GNS has gone from $0.68 to $3.68 and GMX has gone from $13.70 to $41.56

Observe Trading volume. Has one platform absorbed more volume than the other? How impactful is GNS volume to polygon? GMX volume to Arbitrum? Are there any insights that can reveal why Gains Network wants to move into the Arbitrum ecosystem?

Result and discussion:

🔴 Has one platform absorbed more volume than the other?

✅ Although GNS is a legacy network, after launching the GNX network, we see that the GMX volume is larger than that of GNS. At the beginning of GMX's launch, GMX has 1/3 the GNS volume, after 20 days this reverses and GMX has 3 times the GNS volume, so on November 4th on the cumulative volume charts we see that GMX volume is 5 times larger than GNS. Despite the volume, the number of GNS transmissions is much larger than that of GMX. This tells us that GMX users are larger than GNS users. For example, GNS users are like fish and GMX users are like whales. We see this problem in the histogram charts.

🔴 How impactful is GNS volume to polygon? GMX volume to Arbitrum?

✅ We have shown that the volume and number of GNX and GNS consist of a significant volume and number of their blockchains. Especially for GMX the volume is about 30%!!! so these networks could attract large volume to their blockchains.

🔴 Are there any insights that can reveal why Gains Network wants to move into the Arbitrum ecosystem?

✅ We showed that GMX was able to gain a lot of volume compared to GNS after a short period of time. And we have shown that GMX users are larger than GNS users. For these two reasons, GNS might have enough motivation to switch to Arbitrum.

GNS VS GNX

• Gains Network is a decentralized derivatives trading platform built first on the Polygon network and expanding to other decentralized networks.

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• On gTrade, crypto derivative traders are allowed up to 150X leverage and up to 1000x for forex trades.

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• Leverage trading on Gains Network is powered by synthetic assets and a decentralized lending protocol and its leverage system saves users the loan fee paid on other leverage trading platforms.

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• The GNS token is the native token of the Gains network and supports its financial system. It will be used for DAO Voting when GNS's decentralized government goes live.

First on the to-do list of the Gains Network team is to develop a product that “becomes the most adopted decentralized leveraged trading platform”. To realize this vision, it claims to be developing a liquidity-efficient, powerful, and user-friendly decentralized leveraged trading platform. These qualities and even more it claims to be the main features of gTrade; its leverage trading platform.

Through gTrade, Gains Network will attempt to lure perpetual contract traders with a decentralized platform that maximizes their profits while allowing them retain full custody of their assets. Perpetual contract traders will also hope to benefit from the low fee plan on gTrade and the zero fee on leverage loans.

Gains network launched gTrade on 2nd May 2022 on Polygon Network. Since this time, it has served over 450,000 trades from over 6,000 unique traders and has grossed over $19 million in trading volume. The team has announced plans to expand this product to other smart contract networks.

But what is Gains Network, and what is perpetual contract and leverage trading?

What is Perpetual Futures Contract Trading?

Perpetual contracts are a special form of futures contracts. The major difference between perpetual contracts and normal futures contracts is contract expiration. The traditional form of futures contracts has a stated expiry date after which the contracts can no longer be traded. In contrast, perpetual contracts have no expiry period. A perpetual contract trader’s position is valid for as long as they leave it open and maintain it.

The profit or loss will continue to accrue until the trader decides to close the trade, or the exchange liquidates the trader’s account in cases of unmaintained losing trades.

Compared to other forms of futures contracts, the price of perpetual contracts is tightly maintained with the spot price of the traded asset. The perpetual contract price could stray away from the spot price in extreme market conditions, but this happens less often than seen in traditional futures contracts.

What is Leverage Trading?

Leverage trading facilities let you enter a trade position with more capital than you own. They basically let you borrow against your capital and execute a trade. The profits made in the trade are calculated using the leveraged fund while your initial deposit serves as collateral against the funds borrowed from the leverage pool.

For instance, a perpetual contract trader entering a trading position with 10X leverage will have 10 times their initial deposit as the capital for that trade. That is; if their initial deposit is 100 USDT and they use 10X leverage, 1,000USDT is borrowed from the leverage pool while their 100 USDT is kept as collateral. A 20% profit in this trade will mean a 200 USDT gain. This applies to losing trades as well.

In cases where the trader runs into too much loss without adding more funds to their collateral, the account (for that trade) will be liquidated. On liquidation, the trader loses their collateral (initial deposit).

How Does Gains Network’s gTrade Work?

Contemporary leverage trading platforms suffer from undue centralization and a thin leverage limit. On the gTrade platform, traders are able to launch their trading without creating an account with their personal information or depositing their funds to a trading platform.

A simple wallet connection is all a user needs to start trading on the gTrade platform. Traders’ capital remains in their wallets and only moves on the wallet owner’s authorization. These procedures are guided by smart contracts. Asset prices on the platform are provided by a modified version of Chainlink’s Decentralized Oracle Network (DON)

gTrade also features an array of tradable assets for traders’ easy access. On the platform, users are able to trade cryptocurrencies, company stocks, and forex. gTrade offers traders up to 150x leverage on crypto assets, 100x on stocks, and 1000x on forex trades.

Platform users contribute to the pool from which leverage requests are served, and the pool is structured to generate profits for the contributors as part of an extra incentivization and interest-generating plan.

To make gTrade work in this way, Gains Network introduces four ‘tools’ that operate in synergy:

1. A decentralized vault and liquidity pool.
2. A multi-functional token
3. A protocol (consisting of collective algorithms deployed on blockchain networks) that aggregates other facilities and controls their functioning.
4. gTrade also features unique NFTs that give holders certain advantages and incentives on the platform.

gTrade’s DAI Vault

The DAI vault is at the core of gTrade’s functioning. It serves as a pool from which traders borrow funds to execute trades with a higher capital. The DAI vault is contributed by stakers. Stakers deposit DAI to the vault in return for earning interest. The interest received is dependent on the profits made by the vault. The vault is overcollateralized and decentralized.

To trade on gTrade, traders enter with DAI, regardless of the asset they are trading. The DAI is deposited into the DAI vault. The vault is overcollateralized and furnished by traders.

Overcollateralization ensures that there are more than enough funds for traders and that any mild deficits are easily managed and the platform kept stable. To achieve this, the vault’s (over) collateralization is set to 30%. Once it falls below this, measures are implemented to reclaim this collateralization level.

One of the measures is to trade the GNS token for more DAI and replenish the vault. This measure has been dropped for better approaches as the Gains Network team opines that this is not sustainable in extreme conditions. Current measures include increasing the vault collateralization and limiting DAI inflows to negative trade PNLs only.

Traders actively furnish DAI through their usual trade activities. However, the DAI vault is structured to profit from losses and shrink as traders’ gains overrun their losses. Profits for winning trades are paid out to traders through the DAI vault. The vault grows as traders incur losses and their negative PNL is paid into the vault.

If by any chance this collateralization level is exceeded by a wide margin, the extra DAI is used to buy back and burn the GNS token.

The vault is conditioned to grow against traders’ trading success. This structure was developed based on the fact that a majority of derivative trades have ended in a loss. This strategy has worked so far for the GNS team, with over $17 million currently locked in the DAI vault.

GNS: A Multifunctional Token

The GNS token is the native token of the gTrade platform and the Gains Network ecosystem. The GNS token serves as a utility token, a store of value for the ecosystem, and could gain an extra role when Gains Network's decentralized government goes live.

The GNS token was rebranded from the Gfarm token. In line with the rebrand, old Gfarm token holders received GNS tokens at the ratio of 1:1000. That is, holders received a thousand GNS tokens for every Gfarm token held.

The GNS token is used to incentivize the GNS/DAI pool which provides extra support for the DAI vault and the general liquidity of the gTrade platform. The GNS/DAI pool currently holds over $5 million worth of locked assets. This provides strong support for the DAI vault and solid liquidity for traders using the leverage trading platform or swapping between GNS and DAI on QuickSwap.

The Gains Network team also claims to be working towards instituting a DAO powered by the GNS token. GNS token holders will make up the DAO and will be able to contribute to the administration of the platform by voting on improvement proposals. According to shared insights, the GNS token will function just like other governance tokens. GNS holders will stake the tokens to receive veGNS which can be used to vote on proposals.

GNS NFT

Gains Network issued 1500 GNS NFTs which can be used on the platform. The NFTs span five categories and unlock several privileges and enhancements for holders. GNS NFT holders will receive more staking rewards depending on the category of NFT they hold. Liquidity staking reward boosts could be as high as 13% for diamond GNS NFT holders, while the lowest reward boost for NFT holders is currently 2% for bronze NFT holders.

Traders who hold the NFTs will also enjoy a reduced spread while trading. The percentage of reduction is again dependent on the type of NFT held. Gold GNS NFT holders will enjoy up to 35% reduced spread.

These benefits are cumulative for investors who own more than one of any categories or a combination of the categories.

If you’re looking to score one of these, GNS NFTs can be purchased on OpenSea.

What Tokens and Assets are Available on gTrade?

gTrade supports crypto assets and stock trading on its platform. The forex trading facility is also functional and supports up to 1000X leverage.

Notable stocks that can be traded on the platform include TSLA (Tesla), AMZN (AMAZON), GOOGL (Google), META, and NVDA (Nvidia).

For forex traders, gTrade offers EU, USD, GBP, CHF, and JPY.

For users who wish to trade crypto assets, BTC, BNB, ETH, ICP, FTM, FTT, DOT and many other cryptocurrencies can be traded on the platform.

View the full list of assets that can be traded on gTrade here.

GNS vs. GMX

Like GNS, GMX also offers decentralized derivatives trading services with impressive leverage and trading protocol. Both share a good level of similarity; here's how they compare to each other.

Want to learn more about GMX? We’ve covered it in detail here.

Final Thoughts

A zero-fee loan structure is a good point of attraction, but for Gains Network, a decentralized trading platform gives traders limitless control over their assets. The technology on which the platform is built also ensures that this freedom is not misused. Centralized trading platforms have tons of caveats, some of which Gains Network and similar projects are tackling. Massive leverage opportunity is the icing on the top, but it's also the most attractive feature for traders.

On a wider note, Gains Network and other decentralized derivatives trading platforms represent the successful development of an efficient decentralized version of a formerly centralized application.

If these solutions stay true to their promises, traders are offered a safer way to trade and an opportunity to maximize their earnings per trade. Notwithstanding, it is important to understand the basics of leverage trading, especially where it concerns making profits and losses. In general, apply caution while interacting with smart contract platforms and do your own research before investing in volatile assets like cryptocurrencies.

References:

flipsidecrypto.com

✅ Observations

On average "GMX" consist of 10% of "Daily transafer "number", but between 80-90 % of the "Daily transfer volume" is belong to the "GMS". This is while that the "GMX" only started after April 18, 2020, but the start of the "GNS" was a long time ago!

✍️ Description of Work

Daily seal's number of reddit

Daily seal's number of reddit (cumulative)

Daily mint of reddit

NFT holders of reddit

Daily mint of opensea

Daily seal's number of opensea

Holders of opensea (cumulative)

🧠 Methodology

1. for finding GMX and GNS ecosystem we have tracked '0xd8d177efc926a18ee455da6f5f6a6cfcee5f8f58','0x65187fec6ecc4774c1f632c7503466d5b4353db1','0xf8a140db8b05bec52c7e86d0d40d72f8e54fe559 and '0x3d6ba331e3d9702c5e8a8d254e5d8a285f223aba','0xb87a436b93ffe9d75c5cfa7bacfff96430b09868' respectively for arbitrium and polygan.
2. after finding transactions of GNS and GNX we seprated transferring act from anothers.
3. after that we found token transferred in the ecosystems like LINK,WETH .. and labeled them.
4. we added price of tokens and besed on decimals we multiplied price to amount. so now we have the USD amounts.
5. after that we prepared the normalized, tends,volums and numbers charts.
6. for reddit NFT first we found all contact addresses related to it.
7. then we tracked contract addresses op event log table.
8. by decoded json values we found the 3 metrics.
9. we found same metrics on open sea project to better comparison.

✅ Observations

The maximum "daily number of seals"

October 24, 2022 through more than 11.54K transactions in reddit. After this time the number of transactions dropped significantly! The number of transactions at the moment (November 5th) is less than 180!

June 9, 2022 through more than 126.79K transactions in opensea. After this time the downward trend in opensea transaction the number of transactions has started. the number of transactions now (5 November) is less than 21.2K!

Maximum "Daily mint"

*Reddit: 30, 31 August 2022 by more than 200K $. Nowadays this metric is less than **6500$! ***

Opensea: August 24, 2022 by more than 27.23K $. Nowadays this metric is less than 700$!

The "Holders"

At the end of August, the holders of reddit and opensea start their strong upward trend. These days the holder of reddit is more than 2.9M and the holder of opensea is more than 1.94M!

While opensea's "Daily Transaction Count" is higher than reddit, reddit's "Holders" and "Daily Coin Amount" are higher than opensea

✅ Observations

As you can see

The range between 0-10 USD is the most crowded range in GNS, and GMX both!

The dimension of “Number“ of Y axis in the “GMS“ is kilo, but in “GNS“ is million!

By the way, although the “Number“ metrics in “GNS“ is higher than “GMX“, but the volume of the “GMX“ is much higher than “GNS“

✅ Observations

The impact of the “GNS“ ,and “GMX“ on their original ecosystem has been investigated!

As you can see this section has two perspective:

• Transfer volume
• Transfer number

To examine these metrics, we explore all tables related to the "volume" and "count" of transactions in the "polygon" and "arbitrum" ecosystem!

Based on the above diagrams:

Number of transfers

On average after ==August 2022==, GNS constitute more than ==80== percent of the "transfer count" in the polygon. For GMX in the Arbitrum ecosystem, this metric is more than ==95%==!

Transfer volume

On average, after ==August 2022==, GNS accounts for more than ==95%== of the "transfer volume" in the polygon. This value for GMX in the Arbitrum ecosystem is more than ==90%==, approximately!