# Research on Gains

Gains Network is a DeFi ecosystem of multiple products on the Polygon and Arbitrum chains. Its most prominent feature is gTrade, which is a decentralized leveraged trading platform to facilitate crypto and non-crypto trades.
This decentralized leveraged trading system uses its liquidity pools for leveraging, and users do not actually need to borrow assets or possess assets in order to use them. In addition, users of Gains Network do not need to endure the hassle of KYC identification to get started. Instead, their activities are executed directly from their wallets. Gains Network also offers staking rewards, NFTs, one-click trading and future community governance for a superior user experience.

Protocol Stats as of Today (24 Feb)

**GNS Tokenomics**
The native token of Gains Network is GNS, which is a deflationary utility token. This token supports the operation of the gTrade platform through its liquidity efficiency. The platform’s original token was GFARM2, which was established on Ethereum. Later, the platform transferred to the Polygon chain, the GNS token was introduced.

The initial distribution of the token was allocated with 5% to the development fund and 5% to the governance fund. The token is used to mint rewards and to maintain the vault’s stability. When the vault is appropriately over-collateralized, GNS is burned. This prevents inflation related to NFT bot rewards and staking rewards. To date, roughly 20% of GNS tokens have been burned. The initial supply was 38.5 million tokens. There is a supply cap of 100 million tokens. However, a mechanism is used to ensure that the supply will never reach 100 million.

1. It supports the liquidity efficiency of the DAI vault by minting rewards for NFT bots and affiliates, allowing the DAI to remain within the vault. This adds stability by reducing vault drawdowns and supporting its over-collateralization.
2. It can be burned when the DAI vault becomes sufficiently overcollateralized to offer a suitable buffer for DAI vault stakers. This is done to counter the inflation from NFT bot and affiliate rewards.
3. It ensures that people supporting the community early on will not have the percentage of their platform interest diluted by a large whale in future - it gives an equal playing field to community support.
5. It is a backstop to traders winning on gTrade, as $GNS can be minted to recollateralize the gDAI vault (at a maximum inflation rate of 18.25% per year)
6. It is going to be one of the main ways to govern the protocol.
Until now, over 20% of the supply has been burnt through organic deflation generated by gTrade.

**Key Features:**
gTrade
At the core of Gains Network is the gTrade platform. This is a liquidity-efficient platform that uses synthetic architecture to produce a superior trading experience. Roughly 40 trading pairs are supported through gTrade. Users maintain full custody of their assets and trading is available for commodities, cryptocurrencies, stocks and forex. This platform also has more competitive fees than many of its counterparts, and it offers up to 150x leverage for cryptocurrencies and up to 1,000x for forex.

One-Click Trading
Gains Network supports one-click trading (1CT) once you create a 1CT wallet on the gTrade trading platform. After creating the wallet, you would have to approve it as a delegate through gTrade smart contracts so that it can execute trades on your behalf. Once this is enabled, you will no longer need to use your wallet to confirm transactions during trades. You can simply proceed with making your usual trading order which is then immediately processed as requested, reducing the time required to trade.

GNS Staking
GNS staking offers users a great way to earn a passive income. In exchange for staking GNS tokens, users are rewarded through DAI generated from trading fees. Specifically, approximately 32.5% of the trading fees collected on the platform contribute to GNS staking rewards. As such, users are greatly incentivized to share the platform with their friends to increase the total trading volume, which in turn increases the amount of trading fees collected and ultimately results in them receiving more rewards. You can also earn a higher percentage of staking rewards by staking up to three Gains NFTs in the GNS pool. The specific boost in percentage is based on the tier of NFT being staked. For example, a bronze NFT qualifies for a boost of 2%, and a Diamond NFT qualifies for a 13% boost.

gDAI Vault
Gains Network uses a gDAI vault that serves as a conduit for trading activities. Traders who win receive their winnings from the gDAI Vault, and traders who lose send their losses to the vault. A portion of the trading fees for these transactions are stored in the vault. Users can stake their DAI tokens in this vault to be liquidity providers. They are then given gDAI tokens in exchange as a representation of the DAI tokens that they staked. By staking DAI tokens in the gDAI vault, users are rewarded with a share of the trading fees, which incentivizes them to continue staking their tokens in the vault. When users choose to withdraw their DAI tokens, the gDAI tokens are burned.

GNS NFTs
When Gains Network was previously known as GFARM2, 1,500 NFTs were generated. These NFTs were split into five different tiers — Bronze (most common), Silver, Gold, Platinum and Diamond (rarest). While all holders of these NFTs have access to exclusive benefits, the tier of your NFT will determine the extent of the exclusivity. For example, all GNS NFT holders can enjoy reduced spread when trading, but those holding a Diamond NFT will enjoy a 35% reduction while those holding a Bronze NFT will only enjoy a 15% reduction. One of the most interesting benefits of holding GNS NFTs is that users can enjoy a bigger share of rewards when staking GNS tokens.

**What makes Gains unique in the market?**
Paper Trading mode:
The Practice mode can be used in order to test gTrade as though you are live trading, but without using collateral with value. It is done on the Polygon Mumbai Testnet.

Leveraging Power
Traders can take advantage of up to 50x leveraging power on stocks, 150x leveraging power for crypto trades and 1,000x leveraging power on forex trades. This incredible leveraging power is supported by its decentralized vault, the native token’s multiple functions, gTrade architecture and its unique NFTs.

Lower Fees
While leveraging enables traders to make larger trades and to potentially see larger gains, fees can impact the overall financial gain associated with using a specific platform. By operating on the Polygon chain, Gains Network is not subject to the exceptionally high gas fees that some other chains are known for. Because of this, users are able to see a greater net return.

Downside:
A Limit on Open Trades
Currently, Gains Network limits its users to having three open trades for each trading pair at a time. Because new orders cannot be placed and executed based on this limitation, some users may miss out on lucrative trading opportunities.

A Limit on Profits
There are also some current structures in place that may further limit a user’s profitability. For example, Gains Network has a maximum limit on the open interest for each specific pair. In addition, there is a 900% winning cap on trade collateral.

Dune Analytics Dashboards
https://dune.com/unionepro/Everthing-Gains-Network

**How does Gains make money and how much?**
Fees Breakdown
On all pairs, the "Governance & Team" fees are split 50/50, as well as the "ecosystem" fee below which is shared between GNS Single-Sided Staking and the gDAI vault.
The "Market/Limit" fee below goes to GNS staking if the order is a market order, and to NFT bots if the order is a limit order.
Aditionally, the referrer rewards are always taken from the "Governance & Team" fees.
Finally, while all trades are open, they pay the rollover fee and pay / earn the funding fee.
Cryptocurrencies
Spreads on BTC/USD and ETH/USD are fixed at 0.04%, and dynamic depending on the price impact formula on all other pairs.
Opening a trade: 0.08%
0.06% -> Governance & Team
0.015-0.02% -> Referrer
0.02% -> Market/Limit
Updating a stop loss (guaranteed execution):
0.015% -> Governance & Team
Closing a trade: 0.08%
0.06% -> Ecosystem
0.02% -> Market/Limit
Forex (Major)
Spreads on all major forex pairs are fixed at 0.01%.
Opening a trade: 0.012%
0.009% -> Governance & Team
0.00225-0.003% -> Referrer
0.003% -> Market/Limit
Closing a trade: 0.012%
0.009% -> Ecosystem
0.003% -> Market/Limit
Forex (Minor)
Spreads on all minor pairs are fixed at 0.01%.
Opening a trade: 0.016%
0.012% -> Governance & Team
0.003-0.004% -> Referrer
0.004% -> Market/Limit
Closing a trade: 0.016%
0.012% -> Ecosystem
0.004% -> Market/Limit
Forex (Exotic)
Spreads on all exotic forex pairs are set per pair depending on their volatility.
Opening a trade: 0.02%
0.015% -> Governance & Team
0.00375-0.005% -> Referrer
0.005% -> Market/Limit
Closing a trade: 0.02%
0.015% -> Ecosystem
0.005% -> Market/Limit

User Reward
Users are now able to stake GNS tokens for DAI rewards paid from platform fees.
In total, 40% of the fees from market orders and 15% of the fees from limit orders are allocated to $GNS staking.
As 70% of Gains trades are market orders: 32.5% of fees from all orders on average will go to $GNS staking.
Users will be able to stake up to 3 of Gains NFTs to boost share of the staking rewards. Boosts will be:

gDai Vault
gDAI Vault is a DAI vault following ERC-4626, a standard API for tokenized yield-bearing vaults that represent shares of a single underlying ERC-20 asset. For this vault, gDAI shares represent the underlying DAI asset.
The vault serves as the counterparty to all trades made on the platform:
When traders win (positive PnL), their winnings are received from the vault.
When traders lose (negative PnL), their losses are sent to the vault.
In exchange, the vault receives a portion of trading fees. These fees are proportionally split among gDAI shares, incentivizing stakers to stay in the vault.
Collateralization of the vault depends on trader PnL. As long as fees earned is greater than PnL payouts, stakers earn a positive return. This has proven to be the case for two+ years and the protocol has various risk management measures in place to ensure it continues.
When overall PnL is negative, the vault starts to create a buffer with those funds, further protecting stakers' funds and the protocol from future PnL abnormalities.
To better approximate real collateralization ratio, and to minimize risks for the protocol (including stakers), the vault follows an epoch system for capturing snapshots of open PnL. Open PnL represents the aggregate PnL of all open trades at the time of the snapshot.

Comparison:
In summary, GMX is focused on providing a one-stop-shop for DeFi services, while GAINS is focused on providing a fast and secure decentralized exchange for trading digital assets.
-GMX: 171,149 users
-Gains Network: 11,576 users
-Vela Exchange:24,495 users (10 days reach GMXs number in 10 months)
11 mil in trade volume ( $vela )
258 mil in trade volume ( $gains )
395 mil in trade volume ( $gmx )