What Is Gains Network?

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Gains Network has emerged as a leading player in the decentralized derivatives space, carving out a strong position despite the highly competitive DeFi landscape. As decentralized finance (DeFi) continues to mature, derivative trading — long dominant in traditional finance — remains an underdeveloped yet high-potential segment within crypto. While giants like DYDX and GMX lead the market, Gains Network has rapidly gained traction, consistently ranking among the top platforms by derivatives trading volume on DeFi Llama.

Notably, Gains Network not only survived the turbulent Luna crash but also rebounded with remarkable momentum. In recent months, its daily trading volume has frequently surpassed that of GMX, signaling growing user confidence and platform resilience. But what exactly drives this success? Let’s explore how Gains Network operates, its unique features, risk management framework, and why it stands out in the fast-evolving world of decentralized trading.

Core Product: gTrade – A High-Leverage Decentralized Trading Platform

At the heart of Gains Network is gTrade, a powerful, user-friendly decentralized leveraged trading platform designed for both novice and experienced traders. It supports perpetual contracts across multiple asset classes:

This makes gTrade one of the few DEXs offering such extreme leverage — a major draw for speculative traders seeking amplified exposure.

👉 Discover how high-leverage trading works on next-gen DeFi platforms.

All trades are executed on-chain, ensuring transparency and censorship resistance. Despite being decentralized, gTrade delivers a seamless trading experience comparable to centralized exchanges, complete with stop-loss, take-profit orders, low fees, and real-time execution.

To ensure accurate and tamper-resistant price feeds, gTrade uses a custom Chainlink Data Feed Operator Network (DON). This hybrid architecture pulls median values from multiple nodes, minimizing the risk of price manipulation or "price pinning" — a common exploit in volatile markets that can lead to unfair liquidations.

How Does Gains Network Work?

gTrade functions as a peer-to-pool trading system where users trade against a liquidity pool rather than individual counterparties. The core mechanism revolves around three key components: the DAI Vault, GNS/DAI liquidity pool, and GNS staking pool.

DAI Vault: The Foundation of Stability

The DAI Vault acts as the backbone of the protocol. Traders deposit DAI as collateral to open leveraged positions, while liquidity providers (LPs) also stake DAI into this vault to earn yield from trading fees and liquidation rewards.

Crucially, LPs effectively act as the counterparty to traders — when traders lose, LPs profit, and vice versa. Over time, due to the statistical tendency of most leveraged traders to lose money — especially under high volatility and extreme leverage — the DAI Vault tends to generate consistent returns for stakers.

To prevent sudden mass withdrawals during market stress, Gains Network enforces a 24-hour withdrawal cap: no single user can withdraw more than 1/4 of their maximum deposited amount per day. This mitigates systemic risks and enhances protocol stability.

GNS Staking Pool: Earning Fees with Utility

Holders of GNS, the native governance and utility token, can stake their tokens to earn a portion of platform revenues. Specifically:

Given that around 70% of trades are market orders, stakers receive approximately 32.5% of total fee revenue — a compelling passive income stream.

Additionally, GNS NFT holders enjoy enhanced benefits such as reduced spreads, higher staking rewards, and access to automated order execution tools.

GNS/DAI Liquidity Pool: Controlling Supply Dynamics

The GNS/DAI pool plays a critical role in managing token supply:

This dynamic helps maintain system solvency but introduces a risk: under extreme scenarios where large-scale redemptions occur, GNS could face rapid inflation until the cap of 100 million tokens is reached.

Risk Management: A Multi-Layered Defense System

Gains Network employs sophisticated risk controls on both the trader side and liquidity provider (LP) side.

Trader-Side Controls

  1. Spread: Increases with larger position sizes or lower liquidity, discouraging manipulation and protecting against flash crashes.
  2. Rollover Fee: Based on spot volatility; higher volatility leads to higher costs, incentivizing responsible leverage use.
  3. Funding Fee: Balances long/short ratios. When longs dominate, they pay shorts (and vice versa), preventing dangerous one-sided exposure.

LP-Side Resilience

  1. gDAI tokens represent pro-rata shares in the DAI Vault — similar to GLP — and do not guarantee principal.
  2. Trading fees and trader losses create a buffer zone that protects LPs during downturns.
  3. Incentives encourage long-term staking and regulate inflows/outflows dynamically to avoid liquidity shocks.

These mechanisms have become so effective that even established projects like GMX and Synthetix Perp have studied or adopted similar models.

👉 Learn how decentralized protocols manage systemic risk in volatile markets.

Evolution and Milestones

Originally launched as gains.farm in 2021, the project faced early setbacks, including a smart contract exploit shortly after launch. The team responded swiftly, releasing V2 within 15 days and continuing rapid iteration — upgrading nearly every two weeks initially.

Key turning points included:

Today, Gains Network operates across Polygon and Arbitrum, with growing traction following its Arbitrum deployment. Its roadmap includes future plans for zk-rollup integration, fully decentralized governance, and Metaverse ecosystem expansion.

Competitive Landscape

According to data from Token Terminal (as of early 2025), Gains Network ranks behind only DYDX and GMX in terms of derivatives trading volume — surpassing older platforms like Perpetual Protocol. With rising transaction volumes and active users shown on analytics platforms like Dune, the project demonstrates strong product-market fit.

Its combination of ultra-high leverage, broad asset coverage, robust oracle infrastructure, and innovative risk modeling gives it a distinctive edge in the DeFi derivatives race.

FAQ

Q: What blockchain networks does Gains Network support?
A: gTrade is currently available on Polygon and Arbitrum, allowing users to trade with low fees and fast settlement.

Q: Can I use any cryptocurrency as collateral on gTrade?
A: No — only DAI is accepted as margin collateral. This design choice enhances stability by using a well-established, over-collateralized stablecoin.

Q: How does Gains Network prevent price manipulation?
A: Through its custom Chainlink DON network that aggregates prices from multiple nodes, reducing reliance on any single source and mitigating oracle attacks.

Q: Is there a way to reduce trading costs on gTrade?
A: Yes — holding specific GNS NFTs grants users lower spreads and improved execution quality.

Q: What happens if the DAI Vault becomes undercollateralized?
A: The protocol mints additional GNS tokens and sells them for DAI to restore collateral levels. However, this can lead to inflationary pressure on GNS until the 100 million supply cap is reached.

Q: How often does Gains Network release updates?
A: The team follows a rapid development cycle, regularly rolling out new features, security improvements, and integrations based on community feedback.

Core Keywords:

With strong fundamentals, continuous innovation, and growing adoption across major Layer 2 networks, Gains Network represents a compelling evolution in decentralized trading infrastructure — combining performance, accessibility, and economic sustainability in one integrated platform.

👉 Explore cutting-edge DeFi innovations shaping the future of finance.