Kwenta State Log

A living document defining the state of Kwenta

Kwenta State Log

Kwenta Improvement Proposals

KIP-132: Gains Network Perps Marketplace Integration

Simple Summary

The proposed change involves Kwenta to prioritize a Gains Network integration for its Onchain Perps Marketplace to expand its offering through gTrade’s wide variety of pairs, RWA trading, deep liquidity, and high leverage. The prioritization of a Gains Network integration as a liquidity source follows the Perennial and Synthetix integrations, specifically focused on Arbitrum-native liquidity.

Abstract

Gains Network is excited to welcome Kwenta to the Arbitrum ecosystem. This KIP seeks for Kwenta DAO’s approval for the Kwenta team to prioritize the integration of gTrade contracts into their UI and aggregator. By becoming one of gTrade’s early Smart Contract integrators, Gains Network will give Kwenta a dynamic fee share up to 40% and continuous support alongside each protocol upgrade.

Motivation

Background on Gains Network

Gains Network is the mother protocol of gTrade, a fully on-chain perpetual futures exchange that has been live on Arbitrum since January 1st, 2023. To date, gTrade has settled over $73.5 billion of notional volume across commodities, forex, and crypto pairs.

gTrade Differentiation

Key Benefits and Motivations

gTrade has recently introduced Smart Contract Trading which has significantly simplified and enhanced the ability for partners to integrate the trading contracts. Kwenta is a highly esteemed protocol and it makes sense for a strong player to be one of the first partners to integrate gTrade as a true Onchain Perps Marketplace.

In December 2023, Gains Network was chosen by the Arbitrum DAO to receive a 4.5M ARB STIP grant. With the support of these funds, the protocol saw significant growth in Q1 2024, as outlined in this report. Now, with the extension of this program (STIP.B), a new grant of 2.25M ARB has been secured which should lead to increased activity for the protocol again. Incentives run until mid-September, bringing more urgency to the prioritization of Kwenta <> Gains Network integration.

  • Gains Network’s docs can be found here
  • Gains Network’s stats can be found here

By relying on more PerpDexs, Kwenta will become more robust and less dependent on a few liquidity sources, broadening its appeal to a wider derivatives user base. Furthermore, Kwenta gains access to new and customized markets.

Kwenta's current limitation to Synthetix & Perennial markets can be overcome by integrating with gTrade, which supports various assets across commodities, forex, and crypto pairs. gTrade’s decentralized oracle network (DON) allows for fast listings and unparalleled user-experience with guaranteed order execution and scamwick protection. On top of that, gTrade’s trading contracts offer deep liquidity and improved execution.

Adding gTrade as a liquidity venue will provide more liquidity and better execution opportunities for traders.

Post-integration, Kwenta can aggregate order placement across venues to ensure optimal pricing and facilitate larger trades.

Both Kwenta and Gains Network can benefit significantly from a close partnership. Kwenta, as an early adopter of gTrade, can capitalize on Gains Network's growth initiatives and partake in mutual growth on Arbitrum.

Gains Network offers to build directly with Kwenta, ensuring the development of features and infrastructure that are top priorities for both communities.

Gains Network’s agile approach allows for quick adaptation and direct support to meet Kwenta's needs. This includes providing developer resources to support Kwenta’s core team, enabling them to focus on other crucial initiatives such as improving the UX of the core product.

By integrating with Gains Network's gTrade on Arbitrum, Kwenta can significantly enhance its ecosystem, diversify its liquidity sources, and improve its economic model. This strategic move positions Kwenta to capitalize on the growth and opportunities within the Arbitrum ecosystem, making it a leading venue for DeFi derivatives trading.

Specifications

Kwenta will integrate gTrade’s Arbitrum-native markets into the core Kwenta trading UI. Gains Network’s code is open source, for which the integrator docs can be found here. The Gains Network team also reviewed the Kwenta SDK for said integration and confirms the requirements are met to ensure a frictionless integration. Moreover, the team will commit to working closely with the Kwenta team to ensure the integration is conducted in a timely and safe manner.

Traditionally, Gains Network maintains a minimum rev share of 12.5%. However, for the Arbitrum STIP and STIP.B campaigns, an enhanced referral design allows integrators and referrers to earn up to 27.5% of all trading fees generated. Assuming the integration will be live during the Arbitrum STIP.B program, each trade at gTrade using Kwenta’s interface will bring Kwenta up to a 27.5% revenue share on all trading fees generated until mid-September.

Following STIP.B (post-September 2024), Gains Network plans to introduce an improved scheme, regardless of incentivization programs, scheduled to go live by the end of 2024 tentatively. With this new design, Kwenta will become eligible for increased revenue share of up to 40%, depending on the generated volume. As a high-value partner, Kwenta is likely to become eligible for the highest tier possible. Gains Network commits to keeping Kwenta in the loop on the process for this revamp and will ensure that Kwenta’s source is included in this new design. * The exact breakdown is still to be finalized but guaranteed to be competitive and starting from 27.5%.

Gains Network is committed to sharing developer resources to guide the Kwenta team on the integration of gTrade smart contracts. To accelerate the integration, both the front-end and back-end team are available at all times while prioritizing Kwenta for partner integrations.

Gains Network would be proud to partner with an esteemed project like Kwenta. Hence, the team is willing to commit to any co-marketing effort that amplifies the integration going live (X-announcements, Spaces, Medium posts, etc.).