Applicant Name: Lunaman
Project Name: Gains Network
Project Description: Gains Network is developing gTrade, a liquidity-efficient and user-friendly decentralized leveraged trading platform. Our synthetic architecture and custom chainlink DON (decentralized oracle network) make gTrade more capital-efficient than any existing platform, allowing for a wide range of pairs and leverages: up to 150x on cryptos, 1000x on forex, and 250x on commodities.
Team Members and Qualifications:
- Seb (Full-stack dev, Strategy)
- Nathan (Full-stack dev, Management)
- Crumb (Full-stack dev)
- Atlas (Product Manager)
- Lunaman (Biz dev, Partnerships)
- Sam (Biz Dev, Partnerships)
- Ross & Bill (Social media, Marketing)
- Dreamersnat (Frontend dev)
- Konrad (Frontend dev)
- Vesnushki (moderator, community sentiment, graphics)
- Brian (moderator, community sentiment)
- 0xlegend (Frontend dev)
- Deadstep (Smart contract dev)
- Apaul243 (Smart contract dev)
- Website: https://gains.trade/
- Twitter: https://twitter.com/GainsNetwork_io
- Docs: Home - Gains Network
- Medium: https://gainsnetwork-io.medium.com/
Email: email@example.com, firstname.lastname@example.org
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
Requested Grant Size: 7,000,000 $ARB
Grant Matching: 100,000 $GNS
Trading Incentives (85%): 6,000,000 $ARB for our custom trading points system. Rewards various productive behaviors, such as trading high volume, trading well (positive PnL), being consistent and loyal, etc. Flows back to the Arbitrum ecosystem as traders are rewarded for their active participation. Described in more detail in Section 3.
Liquidity Incentives (15%): 1,000,000 $ARB (+100,000 $GNS).
Consists of collaborating with DEXes, Chainlink, lending platforms, and others to promote sustainable liquidity for $GNS and $gTokens (such as $gDAI). The ability for our tokens to be easily tradable with size and used as collateral on several Lending Protocols integrates them deeper into the Arbitrum ecosystem and creates positive feedback loops. Additionally, more gTokens liquidity helps entering and exiting our vaults without going through the regular withdrawal timelock, making it easier to gain new TVL in our vaults. Finally, these incentives will directly flow back into the Arbitrum ecosystem as they directly incentivize the usage of various Arbitrum DEXes and lending platforms.
Funding Address: 0xC0eCc613f6F5e979Ed0169Bf7Af50803E7072e16
Funding Address Characteristics: 4/6 community multisig with each key stored in a hardware wallet.
Contract Address: N/A (each week, trading incentives will be sent directly from our multi-sig to users using a multi-send tool, and liquidity incentives will be sent to DEXes/lending platforms)
- Grow volume and daily unique traders on gTrade to position Arbitrum as a key infrastructure for decentralized derivatives.
- Improve liquidity for our protocol token and vault tokens by supporting the usage of Arbitrum DEXes and lending platforms.
- Increase our gTokens TVL to allow even bigger position sizes and maximum open interests on gTrade.
Key Performance Indicators (KPIs):
- Daily Volume: Increase 30-day moving average of daily volume on gTrade to $80m+ (currently $46m) with the help of trading points incentives.
- Daily Unique Traders: Increase 30-day moving average of daily active traders to 400+ (currently 199) by attracting new users and increasing retention.
- $GNS and $gTokens liquidity: Double $GNS and $gDAI liquidity on Arbitrum (currently $1.2m for $GNS and $200k for $gDAI across all Uniswap v3 pairs) using strategic incentives on important liquidity pools.
- gTokens TVL: Given the targeted increase in volume, which results in increased fees going to the $gToken vaults (such as $gDAI), we target a TVL increase for our vaults to $27m+ (currently $22m).
Please note that although higher TVL in our $gToken vaults contributes to bigger position sizes, this is currently not a bottleneck. We’re far from reaching the maximum volume we can handle with the current TVL due to our very high liquidity efficiency and our substantial over-collateralization layer (currently worth $4m). Therefore this is only a secondary objective.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
This grant is a significant catalyst for short-term growth and sustained growth of gTrade, one of the core platforms having achieved product-market fit in the Arbitrum ecosystem. Some protocols on Arbitrum such as gTrade have reached a point where they can start competing against centralized platforms. One of the main reasons mass adoption is not there yet is due to a lack of marketing and education about self-custody and transparent trading execution. While we are working on our own marketing & education efforts, making it a no-brainer to try protocols such as gTrade with the help of incentives temporarily removes this obstacle. It gives a chance to new users who wouldn’t have otherwise made the effort to try a new platform to learn about DeFi products such as gTrade, try them, and enter the Arbitrum ecosystem. We anticipate that a significant proportion of these new users will not only stay for the long term but also share the platform with other traders they know, leading to sustained growth over the long term.
Justification for the size of the grant:
gTrade is already one of the top protocols in terms of Volume and Revenue in the Arbitrum Ecosystem. Given our current and projected weekly volume and trading fees, we strongly believe the size of the grant is justified to achieve the next growth phase. A lower grant would not be as significant compared to even our current weekly fees of about $140k (and they are much lower than usual, like most perps), which means at best it would refund fees for our existing traders only. Additionally, the points incentives system rewards genuine and organic trading activity and completely prevents any form of wash trading through a cap on volume points. Finally, we believe gTrade is highly competitive in terms of UX (self-custody, guaranteed execution, median spot prices, high number of pairs, 1-click trading, lowest latency possible, excellent UI, etc.) and therefore believe we are well positioned to retain a high proportion of the incentivized volume so that it benefits the adoption of the Arbitrum ecosystem in the long run.
Execution Strategy (Weekly):
- 400,000 $ARB for Trading Incentives.
- 66,666 $ARB (+6,666 $GNS) for Liquidity Incentives.
- GNS-ETH pool on Uniswap v3 through a collaboration with Gamma
- gDAI-DAI pool on Uniswap v3 through a collaboration with Gamma
- Equilibria gDAI pool
- Penpie gDAI pool
- GNS Collateral on Silo Finance
- GNS Collateral on Radiant Finance (Once we have applied for it)
- Other similar pools if new partnership opportunities arise
More details on the point system:
Users earn points as they trade on the platform. All points reset at the start of each week except for loyalty points, which can accumulate over the whole period. The exact weights for each type of point are to be determined. Weights can also vary as we can, for example, decide to increase the weight of skill points for one particular week to generate more engagement, like a trading contest.
- Loyalty Points:
- Encouraging daily engagement is essential to optimize user retention.
- Skill Points:
- Rewarding traders based on their PnL is one of the best ways to incentivize organic and genuine trading activity.
- Volume Points:
- Incentivizing volume directly contributes to the primary goal of this proposal. Pairs that cost more fees to trade on will generate more volume points for the user to prevent farming points on lower-cost pairs such as forex. Finally, the rewards of this category are capped at the weekly fees generated by the platform to ensure traders are not getting paid to generate volume, therefore preventing wash trading. Rewards above the cap are redirected to other point categories, proportionally to their weights.
- Diversity Points:
- Encouraging traders to trade on different asset classes and explore them can lead to more robust trading volume in the long run, as there is always an interesting asset class to trade on at any point in time.
Grant Timeline: Monday, October 16, 2023 - Monday, January 29, 2024 → 15 weeks
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multi-sig holds the power to halt your stream? Yes
Is the Protocol Native to Arbitrum?: No. We originally launched on the Ethereum Mainnet in January 2021, then migrated to Polygon POS in April 2021, and finally launched on Arbitrum on the 31st of December 2022. The vast majority of our trading activity happens on Arbitrum now.
On what other networks is the protocol deployed?: Polygon POS
What date did you deploy on Arbitrum?: 31/12/2022
Protocol Performance: $47b+ total trading volume, 16k+ total traders, $32m+ total fees generated, 1m+ total trades.
We publish a monthly recap on our Medium blog:
TokenTerminal also publishes independent data on gTrade, which can be found here:
- Listing of more pairs (crypto and other asset classes)
- Continuous frontend UI/UX improvements
- Spreads and price impact optimizations
- Multi-collateral support (trade with ETH, USDC, etc.)
- Contract refactors to allow smart contract trading
- Partial adding/closing of trades
- Borrowing fee / OI hedging optimizations
- Cross-margin support
- And more…
Last Audit (v6.4.1 staking contract and compensation handler):
Previous Audits (Halborn, CertiK):
Is your team prepared to create Dune Dashboards for your incentive program?: Yes. For example, here is our existing Dune dashboard for gTrade: https://dune.com/gains/gtrade_stats
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread? Yes. We have dashboards in place that monitor the KPIs of section 3.
Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: Yes