Decentralized leveraged trading platforms are growing in popularity but fail to provide an ideal experience for traders. These platforms often charge high fees on leveraged trades, are subject to scams and often don’t provide the actual price of a crypto asset. Instead, leveraged trading platforms have users investing in a derivatives contract over the actual asset.
gTrade developed by Gains Network is a decentralized leverage trading platform looking to solve the problems with traditional leveraged trading platforms.
A median offering
gTrade is a decentralized leveraged trading platform enabling users to speculate on the real spot price of listed assets as opposed to competitors, which utilize perpetual contracts to generate a different price.
The platform utilizes custom Chainlink (LINK) oracles to pull prices from seven cryptocurrency exchanges and bases its own price on the median of those seven. This process is how the platform can confidently offer an actual spot price. Investors can then invest in the actual asset price with leverage rather than a derivatives contract price.
By pulling an exact price from multiple exchanges, gTrade avoids common issues suffered by other, singular platforms, such as potential price manipulation and scam wicks - a disingenuous trading method in which users trade at a price largely outside of the average trading range. In doing so, the trader activates various stop losses, which, in turn, manipulates the asset price in one way or another.
Powered by GNS
The platform’s GNS utility token powers most user interactions on Gains Network. When it comes to leveraged trading, most platforms borrow leveraged funds. But Gains instead burns and mints tokens when opening trades, simulating profits and losses as necessary.
By simulating leveraged funds, Gains can offer its services with meager trading fees. Fees that do exist go toward Gains’ liquidity providers, incentivizing additional liquidity over time. It’s because of these users that Gains has any network in the first place, so it only makes sense to reward liquidity providers for their offerings.
All liquidity sits in a GNS/DAI liquidity pool, with GNS acting as a synthetic to all tokens within the platform. While GNS is burnt or minted to open trades, the platform houses DAI in its trading vault to pay for closed trades. Then, trading bots automatically refill that lost DAI by slowly minting and selling GNS over time. Overall, these methods create long-term deflationary pressure on GNS supply.
“We believe to have solved the problem of decentralized leveraged trading, as Uniswap did for decentralized spot trading,” claims the team behind Gains Network. “Our capital efficiency is about 100x higher than any centralized or decentralized competitor. We don't charge funding fees, already support ten forex pairs and 37 cryptos (the most of any decentralized platform), and all of this while letting users keep full custody of their funds.”
Since its establishment, gTrade has serviced a daily average of over 100 users with an average of $20 million in daily trading volume. The team plans to integrate other options such as stocks, commodities, and indices while partnering with similar projects to increase its offerings.
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