Gambit Protocol AMA Recap
Mission :
Before we start, Want to talk a bit about the success of $XVIX — for context on your new project?
X :
Sure, $XVIX is our first and main project, we launched in 1 Dec 2020. it was quite hard to get people to notice the project then, as we were just starting out. we did an initial liquidity generation event and start with a market cap of ~30K USD. and it’s been quite amazing see it grow over these months
Mission :
What’s the current Market Cap?
X :
haha i remember when we reached 1 million USD in marketcap, it was hard to believe. The current market cap is ~4 million USD
Mission :
Wow, congratulations on such amazing growth. :) I think lots of people in here are very fond of XVIX at this point. Alright, let’s get to Gambit. :)
So to be clear before we start, this is a bit of an unusual AMA because $GMT is actually on Binance Smart Chain. But, anyway, we’re all aware of BSC by now, so let’s just move on with that fact in mind. . .
Q1) So, first, let’s start with the obvious : how will Gambit Protocol work?
X :
so Gambit is a stablecoin protocol, but before that scares people away, it is not an algorithmic rebasing one, with Gambit we set out to tackle a few issues, both short term and long term.
some of the issues:
- over-collaterisation
- maintaining exposure to crypto while having stability
Generally the most used stablecoins are overcollaterised like DAI or sUSD from Synthetix or centralised like USDC. So with Gambit, how it works is that stablecoins can be minted at a 1:1 ratio with whitelisted assets, e.g. BNB or ETH. the received BNB / ETH is then used by the system to allow anyone to take on leverage long positions and this maintains the stability of the system while generating interest for the stablecoin holders.
Mission :
Alright, so the peg would be maintained by a combination of people hedging into stables, and people longing the assets that are exchanged for stables, right?
X :
yup that’s right
Mission :
Alright, cool. It’s obvious why a decentralized stablecoin is appealing, but how do you foresee this as better than an algo rebasing token ?
I think we all sorta know why, but best to just say it anyway.
X :
yea with the algo stable solutions, it hasn’t maintained stability because of the downward spirals, people sell and the your token reduces in value so more people sell, and the bonds model hasn’t worked completely from what i understand, but also keeping up with the developments, i believe projects like ESD are moving to partially collaterised solutions. Gambit can be seen as partially collaterised as well, but the way we maintain the stability is unique. i haven’t seen any stablecoin project attempt stability through a leverage system
Mission :
Understood. Your solution definitely sound interesting. I really respect that both of your projects are actually setting out to try something new.
X :
yea and i believe the model brings a lot of benefits with it
- with a leverage system, funding rates could be around 100% APR, so depending on utilitisation, that would be a lot of fees generated
- with all the assets in the system, we are also able to provide zero slippage trades between assets, again generating more fees. the plan for Gambit is to distribute some of these fees outwards, while distributing some fees back into the system. so the system’s assets compound by itself, and that would also let the fees compound over time.
Mission :
And who will receive these fees? Back into the system how?
X :
for example, say BNB is a whitelisted asset. The system holds BNB, and traders open longs against it by depositing their own BNB, fees are taken through funding etc. and this results in BNB fees, with a portion that can be just kept as collateral within the system
Mission :
Alright, I think we should move onto the second question as it might help clarify all of this.
Q2) Now that we understand the base mechanics of the Gambit Protocol, can you give us an idea of what the user experience will be like?
Let’s say for both the people longing the whitelisted asset and for the people looking to hedge.
X :
sure, the UX for hedging would be a simple swap interface, for example, if you want to sell BNB, and the price is 300 USD per BNB — you would swap 1 BNB and get 300 gUSD in return, this would be done with no slippage.
for longing, it would be similar to other leverage platforms, but we will not have an order book, you would just be able to select your leverage, open / close your long, again with no slippage. the leverage will be configurable, up to 20x-50x would be fine
Mission :
Oh wow, ok, and how about liquidation of positions, how will that work?
X :
for liquidation, since we want it to be decentralised, we would let anyone liquidate positions once the price is reached. one thing that would be new is that it is possible for us to offer a lowered liquidation price. e.g. if in FTX your liquidation price is 1000 USD, in Gambit, we might be able to offer a liquidation price of 950.
Mission :
How is that?
X :
this is a bit experimental, but because in regular leverage systems it is based on order matching, so liquidation prices must be calculated exactly. However, in Gambit, since there is no counter-party per se, we can take on the additional risk, while still having the system be stable.
Mission :
By using a treasury, supplied by the fees, or something?
X :
yup, by using the assets sold to the system
Mission :
Interesting!
Q3) You’ve mentioned BNB as a ‘whitelisted’ asset, what other assets will be whitelisted, and what’s the process to whitelist assets for usage?
X :
i don’t have the exact list yet, but any major asset would not be an issue, it might make sense to see which assets have the highest open interest. but otherwise we will start with a few assets, and further whitelisting would be done through GMT governance voting
Mission :
alright, which sorta brings us to another question I had ready :
Q4) What’s the utility of the $GMT token? Governance, as you said, I suppose :) What’s the incentive to hold though, is what I suspect people will ask.
X :
yup it governs the whitelisted assets and the distribution of fees. similar to Sushi tokens. so of course it can distribute fees back to staked $GMT tokens, to incentivize more holding.
Mission :
Yeah, makes sense. Do you have a fee structure in mind already? Fees taken / where it is distributed?
X :
i do have a rough one in mind, i think we will refine this closer to launch
- 10% (XVIX — fixed)
- 20% (GMT)
- 20% (gUSD)
- 50% (re-deposited back as collateral)
Mission :
And how about the fees charged? Where exactly are they coming from, and how much? I understand from making positions, or hedging, but how much for say : cashing out of gUSD back into another asset
X :
the fees would be configurable, but to start, we are looking at 0.2%-0.3% fees
Mission :
Got it, then it can be perfected via the GMT governance in future. . .
Q5) We covered what i could think of for Gambit Protocol specifically : but you mentioned XVIX as your “main project”, do you foresee making more projects that will benefit XVIX holders in future?
X :
Yup, our main goal of course is to see Gambit be a success, to have lots of TVL, fees, usage and that would translate to a lot of benefits for XVIX as well. but we still have more ideas, and we promised we would continue to launch under XVIX, so i plan to stick to that
Mission :
Nice, well, we look forward to having you back for a 3rd project after GMT is also a success. :)
I’m going to move onto the last question for our portion, I was going to speak about competition, but we are running low on time and he already does a great breakdown for anyone interested at the bottom of this page :
Q8) Okay, finally, before we move onto audience questions : when can we expect to see the Gambit platform to go live?
X :
we have 12 April as the date for the beta in our roadmap, but we will try to finish before that — we will likely have the testnet earlier as well.
Mission :
Roadmap available here ;
Audience Questions
Q1)will we be able to try testnet ser?
X:
yup for sure
Q2) Could you explain why you haven’t developed the option of opening the short position and are you working on adding the short positions as people that do leverage trading often want both ?
X:
i didn’t incorporate shorting in the initial design and docs, because intuitively, the system needs people to long in order for it to be stable, so my concern was that shorting might bring instability, but i do think it is possible. my idea is to let gUSD be minted with stablecoins like BUSD / USDC, with stablecoins, it can be used to pay the profits for shorts. and if we assume that shorts are profitable 50% of the time then the long term stability would be fine, it would be nice to be able to both long and short on the platform, so yea i do want to have that in
Q3) I see a lot of projects having insurance. do you have any plan for unpredicted exploits or something?
X:
i haven’t looked into it tbh, but it’s a good point, so i will see what can be done there
we do plan to have an audit though
Resources :
- site : https://gambit.financial/
- twitter : https://twitter.com/GambitProtocol
- telegram : https://t.me/GambitProtocol
- docs : https://gambit.gitbook.io/gambit/
