As of the time of writing, the six vaults have an aggregate overcollateralization of $7.856MM. gTrade has capitalized on this high level of overcollat by increasing the ratio of fees allocated toward burning. $GNS, but what if we used this overcollat layer in a way that attracts new traders?
Cacodemon@ on discord (presumably jokingly) sent a message here about how we could airdrop free trading tokens to miladys. Not exactly our target audience, but what if we aidropped tokens which could be used to open a trade subject to zero opening or closing fees?
We could specifically target high-profile traders on GMX, Hyperliquid, and other competitors. Obviously, we wouldn’t announce when the snapshot occurs to keep our traders from flocking to our competitors in search of free trades on our native platform.
The largest problem our platform currently faces is the lack of volume. Perhaps this would attract new users and incentivize them to stay as they earn gTrade credits. Would love some feedback or other thoughts here.
I definitely see where you are coming from! However, overcollateralization is hard-won and easily lost, so giving it away in the form of airdrops would be quite risky for the goal of gaining theoretical trading volume.
If these were custom tokens, would overcollateralization be used to seed liquidity for these custom tokens? Wouldn’t it be better to use the overcollateralization layer for:
Seeding liquidity on other chains
Buying GNS at low prices to reduce the impact of minting at high prices
Enabling greater risk and scaling in open interests for market pairs
Using the overcollateralization layer in these ways might provide more sustainable benefits and align better with long-term goals.
Sorry I think I was a bit unclear in my proposal. I’m not suggesting we directly use the overcollat layer to mint trading tokens, but I think that the creation of a token that represents the right to execute a trade with no opening/closing fees would attract some new traders. Usually these opening and closing fees would go to the vault, bolstering our level of collateralization, but in the case of this proposal, those fees are nonexistent and the edge that gTrade usually has is diminished in that way.
This is what I mean by “using” the overcollateralization, which perhaps isn’t the best way of describing what I’m suggesting.
I’m envisioning that these tokens would not be worth very much on their own and would hold little to no value in a liquidity pool; just an incentive for high-profile traders to try out the platform.
I agree with you in that those three points are important for long-term growth, but I think we as a platform are coming up on a pivotal time with the STIP bridge and a short term campaign like this might just be what we need to onboard more whales.