Deployment of GMX in BNB Chain

BNB proposes the GMX community to support a deployment on the BNB Chain after the launch of GMX Synths. The assets to be included in the initial GLP pool can be discussed in the forum.
BNB Chain is fully supporting the GMX contributors and community’s current plan and understands that deployment in our chain will be relevant once GMX’s current roadmap will be cleared.

About BNB Chain

BNB Chain is a decentralized Layer 1 EVM compatible that uses Proof of Staked Authority (PoSA) as the consensus mechanism. At the time of writing, it has 26 active validators, we are looking forward to increasing (to 41 active validators) this number in the near future. In Q3 its Nakamoto coefficient has increased to 8, a figure that falls within the industry median. BNB Chain is composed of the BNB Beacon Chain (previously Binance Chain) and BNB Smart Chain (previously Binance Smart Chain). BNB Chain is known for its short block time – the average block time is 3 seconds – and low fees.

BNB Chain has a wide and active DeFi Ecosystem with the second largest TVL after Ethereum. The biggest project – in terms of volume and TVL – is PancakeSwap, the DEX with the third highest TVL (~$2.2B) across chains and also has one of the highest daily volumes granting a high degree of liquidity to many supported assets. Other dexes such as BiSwap, DODO, and iZumi also play an important role in the ecosystem, enhancing the liquidity available on the chain. Venus is the most important BNB lending project with about $700M in TVL (4th biggest lending protocol). Since September, Liquid Staking has been gaining more and more traction, by delivering new use cases to the holders of BNB. Wombat is the largest stableswap protocol on BNBChain. With a TVL of more than $110M, it has been able to handle volumes of more than $400M on peak days. These are only a handful of the hundreds of Defi projects that exist on BNBChain, which is the second most active DeFi protocol after Ethereum. The trading volume of BNB DeFi dapps is also among the highest across chains.

The greatest strength of BNB Chain is its community and user base. BNBChain is the chain with the most daily active users, the most transactions, and also the chain with the most unique active wallets. We believe that the chain’s greatest asset is this community.

Data insights

  • BNB Chain had 1M DAU and an average of 2.5M to 3M transactions per day during October. During Q2 of 2022, BNBChain had 427,134 unique active wallets, which accounts for 20.26% of all UAWs
  • In Q3 of 2022, BNBChain was the second biggest DeFi chain with a TVL of $7.6 billion, experiencing a 28.67% increase from Q2 2022
  • At the time of writing BNBChain TVL is ~$6.7 billion; the chain has not experienced significant outflows and the decrease in value locked can be mainly attributed to the sharp decline of crypto asset prices after the market events of the second week of November
  • BNBChain’s TVL market share has been steadily growing since January. On May 15, the BNBChain TVL market share was 6.7%. Today it holds over 9%
  • The main assets by volume are BNB, BTC, ETH, CAKE, BUSD, USDC, and USDT, which could be considered for the first batch of assets composing the initial GLP pool on BNBChain. Nevertheless, we remain open to suggestions
  • BNBChain also supports a large set of wrapped or pegged tokens that could be relevant for GMX (ETH, BTC, … are within this list)

Technical framework

Chainlink, Pyth (through Wormhole), Binance Oracle, and The Graph fully support BNBChain. Nodereal, Ankr, InfStones, Quicknode, and Chainstack are the public RPCs and BSC Scan is the reference token tracker of the network.

BNBChain actively audits the network and its smart contracts with a robust set of security providers. Some of the audits have been performed by PeckShield, VeriChain, CertiK, and Quantstamp, and their results are publicly available. BNBChain runs several initiatives focused on security such as Avenger DAO, a community-run security infrastructure project designed to protect users on BNBChain from possible exploits, scams, and malicious actors.

Rationale

GMX is the natural evolution of Gambit, first deployed in the old BSC. GMX and BNBChain have both evolved and grown tremendously since those times. BNBChain has become the second-largest chain in any relevant metric and GMX has established itself as the most important DDEX and one of the spearheads of decentralized perpetual. It seems also natural for GMX to return to BNBChain.

We believe that the deployment on BNBChain can greatly benefit the GMX community. The chain hosts the largest active user community and the second-highest TVL. GMX would get exposure to the largest retail user pool in the space and to multiple leading DeFi protocols that can work and build with GMX. . We think that the whole GMX offering would find high demand, which would have a positive impact on the accrued fees by $GMX, backed by the deep liquidity of BNBChain and the largest user base in the market. We also believe that in these uncertain times, the resilience shown by BNBChain can be beneficial for the GMX community, not only because of the trust that users have shown by organically growing the BNBChain TVL market share in recent months, but also to diversify any type of dependency risk. The strength of the DeFi ecosystem can serve to guarantee deep liquidity to the GLP pool, which can attract more and more users. Additionally, the BNB on-chain assets and their large volumes can be very interesting for GMX. BNBChain not only offers BNB, whose strength and demand are evident but also a wide range of wrapped assets from other chains. Lastly, the user composition of BNBChain is different from the one from Arbitrum or Avalanche, which would let the protocol access a different segment of users, not just geographically, but also conceptually.

For BNBChain and its community, the deal is clear. The community could first benefit from the low slippage of the GLP and Synth pools. We at BNBChain believe that decentralized derivatives will be the next area of great growth in DeFi and we want our chain to play an important role there. GMX is one of the most attractive projects in this domain and we believe that its deployment would bring us closer to reaching this milestone. The GMX tokenomics would also have a positive impact on the community of BNB holders who are seeking real yields. GMX has proven to be one of the protocols with the greatest capacity to generate fees and distribute them in all of DeFi.

GMX has not only grown enormously in recent months, but it has also become the reference DDEX on which a new ecosystem of its own has begun to flourish. Many of these projects built on top of GMX could be very interesting for BNBChain, so the possible synergies or areas of collaboration are quite wide.

Scope of the deployment

We understand that the GMX contributors are immersed in the development of very important features and updates that are crucial for the development, future positioning, and strength of the protocol, such as the synthetics upgrade.

By aligning with the development efforts of GMX, BNBChain expects that the on-chain deployment of the protocol will not only be limited to the OG perps market and GLP pool, but also to these new functionalities. Especially the synthetics market which we think will generate a lot of demand.

Collaboration

To ensure the success of GMX on BNBChain, BNBChain could carry out a series of initiatives and promotions. These initiatives range from joint promotion (if the minimum requirements for security and other parameters are met), AMA, and joint-twitter spaces to putting the GMX contributors in contact with ecosystem partners. Any initiative that the GMX community believes can strengthen the position of the protocol in BNB is more than welcome to be discussed in the forum.

Conclusion

We believe that a GMX deployment would be beneficial for both parties. BNB and GMX developers are “old acquaintances”, from the days when GMX was Gambit and BNB was BSC. Ever since GMX has become one of the most relevant DDEX, offering a great product to perps traders, zero slippage to users who decide to swap their GLP pool, and revolutionizing real yield distribution with its tokenomics. At the same time, BNB Chain has become the second most important chain by TVL and the first in DAU, community, and unique wallets. We hope that with this proposal we can resume this relationship.

We believe that right now the conditions are perfect for a hypothetical deployment. Decentralized perps have been in the shadow of their centralized counterparts, but in recent months that distance seems to be narrowing little by little. GMX is one of the causes of that distance being reduced, more volume of perpetual being executed purely on-chain and we believe that the next phase of great growth for decentralized derivatives is just about to kick off. In recent months, BNB has established itself as one of the most trusted, used chains with the greatest capacity not only to maintain but also to generate new TVL, in turbulent market conditions. We now find ourselves comfortably in a position to assert that we can offer the necessary basis for GMX to achieve that goal.

Documentation and relevant links

Website

Github

16 Likes

reserved for comment

4 Likes

BNB Chain has been centralized and been showing very little meaningful support to new and independent builders for 2+ years now.

All it’s good at is promoting friendly protocols but since GMX is already listed on Binance there is absolutely no reason to harm tokenomics and expose GMX community to all the related threats.

The mythical BNB DAU is mostly gamefi, no new DeFi protocol has benefited from BNB for a very long time.

The last ANKR + Wombat situation was totally ignored by the team and Wombat was a final independent hope for BNB Chain DeFi.

This is a very easy “No” imho.

10 Likes

Deploying on BNB Chain brings opportunity cost and requires funding to bootstrap LP and users.

So questions are:

for GMX developers:

  1. how much time it will take to launch on BNB chain?
  2. what are the alternative tasks we can focus on?

for BNB chain representatives:

The superpower of GMX is its deep liquidity. It order to quickly achieve it on BNB Chain, we need to distribute esGMX incentives.

If GMX deploys on BNB chain, will you agree to match esGMX incentive 1 to 1 with BNB or BUSD incentives? Double rewards be a great driver to attract a lot of liquidity and users.

4 Likes

Thanks for putting forth this proposal Adam, and reaching out to GMX.

5 Likes

Strongly agree on the “NO”!

5 Likes

Hello jaoda,

Answering your questions from the BNB Chain side.

The strategy you suggest is a good one to quickly collect liquidity, the risk that comes with it is that the major part of the capital attracted by LM incentives usually leaves once it ends. Still happy to consider it!

Giving you a bit more context, at present, there are no leading on-chain derivatives on the BNB Chain, and we strongly believe that GMX could take this opportunity to become the leading one. The demand is already there but not the service so there is no real need to attract capital from other chains to have GMX quickly build deep liquidity on BNB Chain.
For that reason, we believe that supporting the GMX launch on BNB Chain with strong marketing support with all our firepower would be the key strategy for a successful launch!

2 Likes

Appreciate you reaching out to us with this detailed proposal. But unfortunately, this is absolutely a hard no from me on multiple fronts. I won’t list them out given it seems that based on existing answers from community members here, there is a clear understanding of why this is not a good fit.

2 Likes

Hi,

In Q3 its Nakamoto coefficient has increased to 8 I invite the community to check the related messari report), a figure that falls within the industry median.

About BNB Chain support to builders, we have 1,600+ dApps live on BNB Chain built by independent projects and manage to stay attractive to new and existing projects. The just-announced expansion of Opensea and Trader Joe in BNB Chain are good examples.

Based on GMX tokenomics an expansion to the BNB Chain (in due time as mentioned in the proposal) is imo the best way to increase the community earnings given the potential of newly generated fees.

Looking on Dappradar or any reliable source, in terms of absolute numbers, our DAU for DeFi is highly competitive, this also stands for TVL / daily volume or any other meaningful metrics.

This part is not related to GMX nor BNB Chain foundation as we do not have the legitimacy to get between a project and the related community.

For the sake of keeping a constructive debate on this proposal, I would like the community to understand that it will not be advisable for me to answer comments not backed by facts and from newly created accounts (as it can be complex to know if it’s legit or not).
Having said that I’ll be happy to address all questions linked to the topic and I’m looking more to hearing about the community and core team feedback.

I was also thinking that it could be interesting to have a Twitter Space to discuss it more in-depth!

4 Likes

I want to thank the BNB Smart Chain (BSC) leadership for their proposal to have GMX expand there. The Binance ecosystem has been really supportive to GMX, from BSC being the original home of the Gambit community, the listing of the GMX token on Binance and active engagement with Binance web3 wallets to expand the access to the protocol to name a few examples.

What are the key factors to consider when looking at chain expansion:

  1. does expansion expose GMX to additional users who are not engaging or could engage more if we expanded beyond existing chains: BSC has a wide user base with a long contingent of retail users who having utilized Binance (the largest centralized crypto exchange) are making their first forays into self sovereign ownership of assets. The chain has consistently been in the top three of transactions, unique wallets and TVL, providing a clear addressable market.

  2. does the chain have an ecosystem and protocols available that can work with GMX: BSC is home to protocols like Venus (lending markets), Beefy (autocompounder), key Oracle partner Chainlink and most uniquely Binance-peg asset backed tokens in addition to large supplies of other bridged tokens. This means that GMX Synths can supported fully backed markets for every asset in the top 20 list on coinmarketcap including BTC, ETH, BNB, DOGE, ADA, MATIC, LTC, DOT and SHIBA without the heavy effort of getting supply bridged. This allows liquidity providers and traders to benefit from the same stable model that GLP has delivered on a wider range of assets.

  3. will the leadership of the chain support GMX in our goal of creating efficient capital markets on their chain: BSC has shown a great intent to support GMX using its wide reach to assist in building visibility and liquidity to ensure that the bootstrapping process for deployment of Synthetics will not require large incentives. They have also already made introductions to leading protocols in the ecosystem to ensure strong introductions.

More broadly does GMX need to expand to more chains? No it doesn’t but if we expand chains we have the potential to have more people who are more native to a single chain to experience the platform and have a greater footprint to support any future efforts on a cross-chain marketplace by having users and other protocols already partnered natively in those environments.

The deployment of GMX Synths is also much more versatile and easier to deploy compared to the current GLP model. What this means is that after fully deploying on our existing chains (Arbitrum and Avalanche) the effort for further chain expansion isn’t as large for an additional 1 or 2 more EVM environments.

9 Likes

I believe there is a lot of wishful thinking in this reply. Though, I understand a concern of me creating a new account – a fair one but thought to share my BNB experience to GMX community as its the first time I feel like having a relevant input (based on expertise).

Decentralization: BNB Chain improves but there are aspects as blcklisting which was demonstrated during last exploit (chain pause, deposits of “printed” BNB to Venus). This is not critical but still a lot of room for improved safety models without sacrificing decentralization.

DAU/DeFi: PancakeSwap is very strong on its own; that generates a lot of BNB DeFi DAU. However, it is not correct to mix in BNB Chain recent achievements and CAKE’s historical performance.

Opensea on BNB displays very low vilume/performance; Trader Joe’s move is yet to be displayed on market but I do not see any reasons for this to change. Wombat’s example was again to identify that very few new names on BNB don’t have it easy; ANKR’s fault is ANKR’s fault, indeed a different topic.

The momentum on Arbitrum is strong and I assume that the move to BNB would be more reasonable when BNB displays more DeFi momentum besides PanCake. I. e. I see GMX doing great on BNB Chain but not in its current state.

The reasons could be many (like promoted vs factual value proposition) but I respect a request not to comment on this matter too much since it is not directly relevant.

In other words, I see why BNB needs and wants GMX on its chain. But in the current environment I could not justify the move; hope that would change some time this year. The bottlenecks on BNB Chain are not critical and there is plenty of resource to improve the chain’s state; hope my input is not considered too direct/aggressive.

1 Like

Very much in favour of this proposal. Yes, there are always drawbacks / concerns and it is good that there is an open discussion about that. Anyhow, I do believe that exposure to BNBchain and it´s userbase can be a significant growth factor. BNBchain is one of the to-go chains for people starting in this space and I do believe it is good to cover this community. Will the trading experience be equally to the current arbitrum experience (speed of execution, etc)? I currently don´t think so, but given the development focus from the BNBchain team I am convinced that things can change very quickly. At that point it would be good for GMX to already have the exposure to BNBchain and not start the deployment late. Don´t forget why GMX became such a success on arbitrum; Part of it was because GMX was very early here and I recall a lot of scepticism in the beginning.
I do believe there is a significant market both for the GLP model, as well as the synths model on BNBchain and would be happy to see GMX evolving even stronger into a multichain model.

3 Likes

tl;dr this is a poor R/R decision for GMX. We may not get many new users + risk exposing the entire protocol to security and reputational risk + may consume considerable resources during migration and throughout maintenance/upkeep

One critical consideration for chain deployment is the possibility for safe, synchronous (or as close to that as possible) composability across chains. And it is far easier to do (near) synchronous composability across Ethereum-native rollups.

There is some inherent tension here of course between DAUs vs. chain security, which is important to acknowledge. Some of the chains with the highest “user count” (this is all miniscule if you look at current usage across every chain in the grand scheme of total addressable users in the world + also active wallet addresses is generally not a good metric) have had a remarkably terrible track record with regards to smart contract security and safety / liveness. It is unfortunate that today there has to be this trade-off, but I suspect that will not be the case forever.

One way to frame this trade-off is that for every unit of dev contributor resources necessary to first deploy on a new chain and then maintain / monitor those deployments, that is incremental time that could have been spent improving our presence on existing ecosystems (Arbitrum and Avalanche) that have stood by us and have been critical to our continued success in a deep bear market.

Longer term, these are also resources that should be spent in earnest to investigate all the various validity & zero-knowledge execution layers that are going live within the next few years. Would you rather deploy on BNB Chain or any of the numerous zkEVM options that are out there? What about app-rollup SDKs if, let’s say, the community thought a GMX-app-rollup-chain on top of Ethereum was worth pursuing a la dYdX pre-Cosmos migration when it was run on StarkEx? And unlike when dYdX v2 went live several years ago, we are now no longer limited to StarkEx, as there are numerous projects working on lowering barriers to deploying app-specific rollups.

Furthermore, I would challenge the audience here to name a single DeFi protocol (a straightforward one, not one of these aggregator or meta-aggregator apps like Beefy) with 1) significant economic activity and 2) is deployed across more than one chain that does not follow this rule: thus far in the (admittedly very short) history of defi, economic activity for a Defi protocol *tends* to concentrate in one or two chains.

Here’s some data so that you can assess the evidence for yourself: DefiLlama & CryptoFees.info.

And here’s one particularly notable example of a protocol that made the decision to expand across as many chains as possible.

Please let me know what you see in this chart:

In DeFi, you are only as good as your previous hack or exploit. The trade-off here extends beyond sucking up developer and BD resources – it is reputational and brand risk. More chains, particularly those that take a lackadaisical approach to decentralization and do not have a security-oriented community of devs & users, likely leads to more risk.

5 Likes

Seeing a lot of misunderstanding in these replies. Overall, great proposal.

• Many of us on ct are unaware of just how much BSC proliferated in Asia during the bull run. Though it would seem switching chains just requires pushing a few buttons, differences in user base and appeal are very well cemented. GMX on BSC is an easy way to gain further market share.

• Differences in decentralisation of the chain do not preclude GMX from having good security. GMX deployments on various chains are completely risk-isolated. There are no obvious and direct security risks from deploying on BSC.

• The GMX LP does not have any incentives from GMX. This could be the case on BSC as well. Therefore no clear risks to tokenomics. esGMX is however distributed if GLP yields are below a certain amount. I don’t consider more esGMX a tokenomic risk, although it is dilutive, so it would be great to see @adambnb BNB chain provide $BNB incentives on GMX.

@coinflipcanda highlights an important point, binance-peg backed tokens allows GMX’s synths to support deep liquidity across popular markets. GMX also has an opportunity here to closely integrate with Binance:

• GMX and Binance should explore integrating GLP into Binance CEX DeFi staking and liquidity farming to directly access liquidity from a CEX within GLP. @adambnb

• Deploying on a new chain is not as complicated as it would seem and the benefits of deploying on BSC strongly justify dev man hours spent. Stargate defies the rule you stated.

Very excited for this! Will be great for GMX to access different user bases across arbitrum, polygon, and now bsc.

6 Likes

Respectfully no, I would much rather launch next on other L2’s.

2 Likes

That’s a no as well,

If GMX moved from BSC, this is for a reason. Looking at metrics on Terminaltoken or Defillama shows that BSC is not revelant for GMX which worth half billion

1 Like

No for me aswell, i believe the GMX ethos does not allow us to redeploy on BSC in terms of lack of decentralization on the BSC

also i would rather focus on L2s first.

3 Likes

It’s a big yes for me.

I do not understand the rationale on preferring to launch on other L2s, what is the purpose of opening 5 McDonald’s in the same street?
Opening in other L2s will address the same limited communities, the growth potential is close to null.

BSC expansion topic is not about decentralization, it’s about mass adoption and for most people the web3 journey start with BSC (even the GMX core team started there), and based on the “no” comments it’s even more clear that the communities are totally different, it’s definitely a fresh market with new users for us and appealing revenue opportunities.

If BSC team could just bring some guarantees that they will provide necessary support to advertise and educate their community about GMX it will be perfect.

4 Likes

Strong yes from me

  1. Grows GMX TAM by almost 4x and has strong retail presence willing to use this kind of protocol.

  2. Binance is the biggest player in crypto by an order of magnitude, having them as an active partner in making GMX even more successful is probably the biggest PR batch you could get in this industry. That kind of awareness is priceless if you are serious about being a top 20 project.

  3. GMX model does not represent a threat to Binance dominance and GMX success in BNBChain could further cement BNB as one of the biggest chains out there. Incentives are incredibly aligned

  4. “Risks” are arguably smaller than deploying on recently launched L2s as everyone is proposing (I also advocate to deploy on those). The bigger GMX surface area on different chains, the less dependant it becomes on each chain so it will reduce risk overall.

  5. Centralization concerns while factually correct, should not prevent GMX from deploying there imo (WBTC/USDC/USDT are also quite centralized, should GMX stop using them?)

I also have a feeling some people in the community have completely forgot what got us here, being humble and lots of hard work from core contributors. Not letting the smallest opportunity slip.

GMX was the first protocol to deploy on Arbitrum at a time where the biggest players like Uniswap & Synthetics have already chosen Optimism. If that was not a bold move, well…

Lots of comments last months about “GMX being too good to be on Y or Z”.

Not that long ago GMX was a complete underdog and the biggest CT guys writing about GMX had 5000 followers and now we are saying the 2nd biggest chain in crypto by almost any metric is “not suitable for GMX”

Its good to be cautious, but being too picky is not the way to grow.

The fastest way to kill a project is becoming complacent, losing the hunger and failing to make moves because they have risks attached. That’s at least my opinion.

Thanks for the proposal @adambnb

7 Likes

I see a need for a GMX like protocol on BNB chain, and there is a significant user base that does not venture to other chains. I understand the concern for decentralization but the GMX devs have demonstrated a competence for security. That being said I would be interested in developer opinions on how the centralization of BNB chain would effect GMX. I think that would this to proceed though, the BNB team would need to provide financial incentive to users in for form of BNB whether through a grant, trading contest etc.

1 Like