GMSOL: Bringing GMX V2 to Solana and realizing the trinity of decentralized leverage trading

[gmsolq]

@jaoda

You may ask, why is the SOL/USD pool backed by SOL and not SOL-USD 50/50?
Because

1. It increases LP effectiveness and performance during the bull market. And GMSOL will only succeed if it proves itself to be highly effective, because GMSOL doesn’t have the luxury of giving its users inflationary rewards in its own token.
2. It is more convenient to use as the DeFi LEGO brick. As collateral for borrowing, for example.

I agree, and that’s also why: Add single BTC pool and single ETH pool to boost TVL 10x

@jaoda

You declare a lot of trading markets, 50+. Tbh, even the 25 markets on your screenshot look scary, because this will cause massive liquidity fragmentation.

I think this approach will lead to:
— frustration of LPs: too many markets to chose for LPing. There are too many actions to perform in order to obtain a diversified LP basket.

— frustration of users: there are a lot of markets, but most of them are illiquid.

— again, frustration of LPs, because the liquidity fragmentation will lead to much lesser asset utilization and therefore less APR

On this issue, my opinion may differ from yours:

First, we need to clarify a question, which is the mission of GMSOL. GMSOL’s mission is to realize more markets and liquidity pools, provide traders and LPs with as many choices as possible, while ensuring the security of contracts, the smoothness of user experience, and the stable operation of products as much as possible. In other words, GMSOL maintains neutrality.

For different trading markets, especially when the number of markets is large enough, there will definitely be cases of price manipulation attacks in some markets. Both LPs and traders may face all losses, which is not decided by GMSOL, and it is not something that GMSOL can help users avoid. What GMSOL can do is provide comprehensive risk warnings. GMSOL won’t represent the interests of either LPs or traders, nor will it have any conflicts of interest with any party. GMSOL remains neutral.

For GMSOL itself, what we can do is ensure that GMSOL itself has no theoretical possibility of acting maliciously. If you can think of any way that GMSOL has the opportunity to act maliciously or do things that harm users, please discuss it in the GMSOL group. If there is a solution, then our highest priority is to implement that solution. If there is no solution, then our highest priority is to come up with that solution.

Regarding the issue of liquidity dispersion, it obviously exists. Except for BTC, ETH, and SOL, other assets can be considered as long-tail assets based on market capitalization ranking, and their liquidity is imperfect anywhere. We certainly need to make some efforts and try to attract liquidity with reasonable mechanisms, such as allowing GMSOL LPs to simultaneously obtain real yield and points. This is the biggest thing we can do, but it is already independent of GMSOL’s mission as an infrastructure. We are very accepting of the fact that there may be some pools with zero liquidity, which is bound to happen. If there is no trading demand for this asset, naturally there will be no need to provide liquidity; if an asset has a very strong trading demand, assuming that the trading infrastructure we provide is excellent enough, it is impossible to have no liquidity provided.

In summary, GMSOL’s pursuit of perfection will only be reflected in the pursuit of product details, permissionlessness, and decentralization. We do not pursue imposing GMSOL’s standards on every user. We cannot and do not seek to achieve perfect liquidity and perfect risk for every market and every pool, which is impossible. We also believe that the market and users have sufficient ability to make reasonable choices.

@jaoda

universal pool (all other pairs), backed by SOL
You can set a separate OI limit for every pair, limiting the risk. For example, the OI limit could be 1% of the daily perp CEX volume for that pair

I agree with you on this point. This is actually the mechanism of GMX V1. Perhaps we can also implement GMX V1 in GMSOL, such as building GLP_MEME, GLP_DEFI, etc.