What is Gains Network (GNS)? New derivatives trading platform

• About Gains Network
• What is Perpetual Futures Contract Trading?
• What is leveraged trading?
• How does Gains Network's gTrade work?
• gTrade's DAI Vault
• GNS: A multifunctional token
• GNS NFT
• What tokens and assets are available on gTrade?
• How secure is Gains Network?
• GNS vs GMX
• Epilogue

About Gains Network

First on the Gains Network project team’s to-do list is to develop a product “to become the most accepted decentralized leveraged trading platform”. To realize this vision, they claim to be developing a liquid, robust and user-friendly decentralized leveraged trading platform. These qualities and it even claims to be the main features of gTrade – its leveraged trading platform.

Through gTrade, Gains Network will strive to attract perpetual contract traders with a decentralized platform that maximizes their profits while allowing them to keep full custody of their assets. Long-term contract traders will also hope to benefit from the low fee plan on gTrade and zero fees on leveraged loans.

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

What is Perpetual Futures Contract Trading?

Perpetual contract is a special type of futures contract. The main difference between perpetual contracts and regular futures contracts is the duration of the contract. The traditional form of futures contract has a stated expiration date after which the contract is no longer tradable. In contrast, perpetual contracts have no expiration date. A perpetual contract trader's position is valid as long as they maintain it.

Profit or loss will continue to accrue until the trader decides to close the trade or the exchange liquidates the trader's account in the event of a losing trade for unknown reasons.

Compared to other forms of futures contracts, the price of a perpetual contract is closely related to the spot price of the trading asset. Perpetual contract prices can deviate from spot prices under extreme market conditions, but this is less likely than in traditional futures contracts.

What is leveraged trading?

Leveraged trading facilities allow you to enter a trading position with more capital than you own. Basically, they allow you to borrow with your own capital and execute trades. Profit made on the trade is calculated using leveraged funds while your initial deposit is used as collateral against the borrowed funds from the leverage pool.

Example : A perpetual contract trader entering a trading position with 10X leverage will have 10 times their initial deposit as capital for that trade. That is if their initial deposit is 100 USDT and they use 10X leverage, 1,000USDT will be borrowed from the leverage pool while their 100 USDT is held as collateral. A 20% profit on this trade would mean a 200 USDT profit. This also applies to losing trades.

In case a trader loses too much without adding more money to their collateral, the account (for that trade) will be liquidated. On liquidation, the trader loses their collateral (the initial margin).

How does Gains Network's gTrade work?

Leveraged trading platforms are overly centralized and leverage limits are too thin. On the gTrade platform, traders can start their trading without creating an account with their personal information or depositing their funds into a trading platform.

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

gTrade also has a wide range of tradable assets for easy access by traders. On the platform, users can trade cryptocurrencies, corporate stocks and forex. gTrade offers traders up to 150x leverage on crypto assets, 100x on stocks and 1000x on forex trading.

Platform users contribute to the pool from which leverage requirements are served and the pool is structured to generate profits for contributors as part of an incentive scheme and additional interest generation.

To make gTrade work this way, Gains Network introduces four “tools” that work in sync:

• Vault and Decentralized Liquidity Warehouse
• Multifunctional Tokens
• A protocol (consisting of collective algorithms implemented on a blockchain network) that brings together other facilities and controls their operation
• gTrade also has unique NFTs that give holders certain advantages and incentives on the platform

gTrade's DAI Vault

DAI vault is at the core of gTrade's operations. It acts as a pool from which traders borrow funds to execute trades with higher capital. DAI vault is contributed by stakers. Staker deposits DAI into the vault in exchange for interest. The interest received depends on the profit earned from the vault.

One of the measures is to trade GNS for more DAI and replenish the vault. This measure has been dropped in favor of better approaches as the Gains Network development team considers it unsustainable under extreme conditions. 

Active traders offer DAI through their usual trading activities. However, DAI vaults are structured to profit from losses and shrink as traders take in more than their losses. Profits for winning trades are paid to traders through DAI vault. Vaults grow as traders take losses and their negative PNL is paid into the vault.

If this collateral is accidentally exceeded by a wide margin, the additional DAI is used to buyback and burn GNS.

The vault is facilitated to grow based on the trading success of traders. This structure was developed based on the fact that the majority of derivatives trades ended up losing. This strategy has worked so far for the GNS team, with over $17 million currently locked in the DAI vault.

GNS: A multifunctional token

GNS is the native token of the gTrade platform and the Gains Network ecosystem. GNS serves as a utility token, a store of value for the ecosystem, and can have an additional role as the Gains Network's decentralized governance works.

GNS has been renamed from Gfarm token. Along with the rebranding, former Gfarm holders received GNS at 1:1000. Meaning the owner received one thousand GNS for each Gfarm held.

GNS is used to incentivize the GNS/DAI team to provide additional support for the DAI vault and the general liquidity of the gTrade platform. The GNS/DAI team currently holds more than $5 million worth of key assets. This provides strong support for DAI vaults and solid liquidity for traders using the leveraged trading platform or swapping between GNS and DAI on QuickSwap.

The Gains Network team also claims to be working on setting up a DAO powered by GNS. GNS holders will make up the DAO and will be able to contribute to the management of the platform by voting on improvement proposals. According to shared details, GNS will function like other governance tokens. GNS holders will staking tokens to receive veGNS which can be used to vote on proposals.

GNS NFT

Gains Network has released 1,500 GNS NFTs that can be used on the platform. NFT spans five categories and unlocks a number of perks and enhancements for owners. GNS NFT holders will receive more staking rewards depending on the type of NFT they hold. The liquidity staking reward increase can be as high as 13% for NFT GNS holders, while the lowest reward increase for NFT holders is currently 2% for NFT coin holders.

Traders holding NFTs will also enjoy reduced spreads while trading. The percentage drop again depends on the type of NFT held. Gold GNS NFT holders will enjoy a reduced spread of up to 35%.

These benefits accrue to investors who own more than one of any portfolio or combination of portfolios.

If you're looking to hit one of these points, you can buy GNS NFT 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 leverage up to 1000X.

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 want to trade crypto assets BTC, BNB, ETH, ICP, FTM, FTT, DOT and many more cryptocurrencies can be traded on the platform.

GNS was developed to add value to the network and add value with the platform. In addition to the token's utility discussed, additional emission and distribution plans have also been put in place to maintain the value and availability of the GNS token.

The total GNS supply is 100,000,000 tokens, of which about 29,000,000 are already in circulation based on data from CoinGecko. According to the GNS team, about 20% of this was burned as part of a buyback scheme using excess collateral from the DAI vault.

5% of the total supply has been devoted to each GNS developer and manager fund (10% of the total supply).

How secure is Gains Network?

Gains Network's leveraged trading contract has been around for about 5 months and has processed over 460,000 trades. Current reports suggest that these transactions were executed securely and users have yet to report any traceable wallet breaches to the Gains Network platform. Gains Network also claims that their contracts are safe to use and audited.

An audit report by Certik confirms this claim but hints at lightweight vulnerabilities and centralized threats. The provisions of this report have been acknowledged by the Gains Network team. However, it should be noted that smart contract protocols are high-level computational commands and are vulnerable to security vulnerabilities that can be exploited in a number of ways. Therefore, users should do their own research and apply measures to keep their funds safe and limit losses in case of unexpected risks.

GNS vs GMX

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

Epilogue

The zero-fee loan structure is an attraction, but for Gains Network, a decentralized trading platform that gives traders unlimited control over their assets. The technology on which the foundation is built also ensures that this freedom is not abused. Centralized trading platforms have a lot of caveats, some of which Gains Network and similar projects are dealing with. Big leverage opportunity is the top freezing factor, but it is also the most attractive feature for traders.

On a broader note, Gains Network and other decentralized derivatives trading platforms represent a successful evolution of an efficient decentralized version of a previously centralized application.

If these solutions live up to their promise, traders will be provided with a safer way to trade and the opportunity to maximize their earnings per trade. Even so, it's important to understand the basics of leveraged trading, especially as it involves making profits and losses. 

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