GMX V2 Hybrid Deployment on Botanix

Proposals
1

Proposal Overview

This proposal seeks to gauge the GMX community’s interest in deploying GMX V2 on Botanix’s Spiderchain — positioned as the first Bitcoin Layer 2 designed to unlock Bitcoin DeFi. This proposal outlines the deployment of a dedicated Bitcoin market secured and settled on Botanix with Bitcoin finality, while also leveraging GMX’s crosschain capabilities to support a broader set of markets.

If this proposal is approved it will allow contributors to negotiate and execute a partnership agreement with Botanix Labs covering technical and commercial terms for the benefit of the DAO and to give effect to the requirements of the same.

Summary

GMX is a leading decentralized exchange renowned for its deep liquidity and upcoming crosschain framework. With Botanix Labs developing Spiderchain—a Bitcoin Layer 2 that offers low fees ($0.02 average tx cost), fast block times (~5 seconds), and full EVM compatibility—GMX sees a strategic opportunity to tap into the Bitcoin ecosystem.

Key highlights of the integration include:

  • Dedicated Bitcoin Market: GMX V2 will establish a market where trades are secured, settled, and collateralized by native Bitcoin, enhancing security and trust and offering a Bitcoin-on-Bitcoin trading solution.

  • Optimized User Experience: By offering Bitcoin-native trading on an EVM-compatible platform, GMX can onboard a new user base from the Bitcoin community while delivering familiar, high-performance DeFi trading features.

  • Market Leadership: This expansion reinforces GMX’s position as the leading perpetual DEX for trading Bitcoin on public blockchains, with a commitment to transparency and verifiably fair execution leveraging Chainlink Datastreams.

Reasons for Integration

  1. Access to a New User Base:

  • Bitcoin DeFi Onboarding: Botanix’s Spiderchain attracts Bitcoin holders new to DeFi. A dedicated GMX Bitcoin market will serve as an accessible entry point for new traders and liquidity providers. Single asset gmBTC pools are expected to be especially attractive to bitcoiners seeking yield on their bitcoin.

  • GMX Visibility: In addition to the primary BTC markets, with the passing of the Bridge proposal, GMX can now extend the availability of $GMX into new ecosystems and offer $GMX as the second asset available for trading on this dedicated deployment.

  • Liquidity Diversification: By settling trades in Bitcoin, GMX can diversify its asset offerings and capture additional trading volume, also solidifying its presence across the top three L1s (Bitcoin, Ethereum, Solana)

  1. Enhanced Security and Settlement:

  • Bitcoin-Secured Trading: Settling trades with native Bitcoin minimizes counterparty risk by leveraging Bitcoin’s robust security properties.

  • Low-Cost, Fast Transactions: With approximately $0.02 gas fees and ~5-second block times, Spiderchain offers an efficient trading environment. While the execution environment is not as fast as Arbitrum and Avalanche, the focus on Bitcoin trading is expected to make the trade-off acceptable to this new user base, given the more decentralized approach to delivering consensus.

  1. Strategic Partnership and Innovation:

  • Ecosystem Growth: Collaborating with Botanix Labs positions GMX at the forefront of Bitcoin DeFi innovation; they have secured other key DeFi integrations across the chain including Chainlink, Dolomite, Ether.fi, and Aave, providing a familiar set of integration partners who can drive our go to market.

  • Future-Proofing: The integration leverages Botanix’s decentralized multisigs, evolving governance model, and secure infrastructure to ensure long-term stability and scalability.

Technical Feasibility

  1. EVM Compatibility:
  • Botanix’s Spiderchain is fully EVM-equivalent, ensuring that GMX’s smart contracts and trading mechanisms can be seamlessly ported and operate reliably.
  1. Settlement and Security:

  • Bitcoin as a Settlement Asset: Trades on GMX V2 will be secured by native Bitcoin, taking full advantage of Spiderchain’s design.

  • Infrastructure Support: Botanix has secured the deployment of Chainlink Datastreams, a critical component for GMX V2 on a new chain. In addition, all key infrastructure providers—such as RPCs, relays, subgraph, and keepers—have confirmed support, ensuring the integration is backed by a robust and reliable ecosystem.

  1. Crosschain Interoperability:
  • GMX’s robust crosschain architecture, paired with support from Chainlink’s oracles and Botanix’s infrastructure, will enable smooth asset and data transfers across multiple blockchain ecosystems.

Deployment Plan

  1. Phase 1: Community Engagement & TEMP CHECK
  • Solicit feedback from the GMX community and stakeholders to assess interest, identify technical challenges, and refine the integration strategy.
  1. Phase 2: Vote & Partnership Negotiations
  • Subject to receiving positive feedback, seek DAO support for concluding negotiations and empowering GMX Contributors to negotiate an expansion agreement, including marketing and technical terms, which may include milestones linked to exclusivity.
  1. Phase 3: Implementation & Monitoring
  • Conduct development and testing on Botanix’s gated mainnet, followed by a phased mainnet deployment. Continuous monitoring and risk mitigation will be implemented throughout the process working with Chaos Labs, Guardian, Hexagate, and our Security Committee.
  • All key infrastructure providers have already confirmed support for the chain, ensuring a limited technical lift.

Risks and Mitigations

  1. Technical Integration Challenges:
  • Close collaboration with Botanix’s technical team and rigorous testing will address potential issues before mainnet deployment, although full EVM compatibility should limit the potential issues.
  • GMX has yet to finalize its plans for cross chain collection and distribution of GMX fees which in addition to development requires the full implementation of the bridge partner for GMX. There will be a period of time where fees on Botanix accumulated and then distributed to GMX stakers after the completion of the development of this infrastructure.
  1. Market Adoption:
  • Robust community engagement and working with key integration partners where appropriate on incentive structures to ensure high user adoption.

Call to Action

We invite the GMX community to provide feedback and express their support or concerns regarding this proposal. Your input is essential for shaping the next steps toward integrating GMX V2 on Botanix’s Spiderchain—a move that promises to expand market reach, enhance security with Bitcoin settlement, and pioneer crosschain trading in the evolving Bitcoin DeFi landscape.

Next Steps

  1. Feedback & Discussion:
  • Engage on our community forum to discuss technical details, market implications, and potential risks on this proposal.
  1. Vote and Partnership Negotiations:
  • If successfully voted, negotiate a partnership agreement with Botanix Labs covering technical and commercial terms for the benefit of the DAO.

Your participation is crucial in determining the future direction of GMX’s expansion into Bitcoin DeFi. We look forward to your constructive feedback and support.

8 Likes
2

I have financial exposure to this space through investments in several Bitcoin L2s made last year, including Botanix. These investments were made based on a personal thesis that Bitcoin L2s can unlock Bitcoin-native liquidity, creating opportunities for DeFi to plug into that capital and expand its reach. I also see this as a potential long-term path toward addressing Bitcoin’s unfunded security budget by increasing economic activity on the network.

To avoid any perception of bias or conflict, I plan to abstain from voting on this proposal so that my votes don’t end up being a deciding factor.

2 Likes
3

Fully support gmx deployment on Botanix, will allow us to be at the forefront of BTC l2.

3 Likes
4

GMX’s lightning in a bottle moment was undoubtedly an early deployment onto (what would become) one of the leading L2s, Arbitrum. In this context, expansion onto the spiderchain makes sense.

I have two questions, and for lack of a better term I will refer to full deployments such as Arbitrum and Avalanche as liquidity hubs.

Initially Botanix would be a stand alone deployment, but in future could it become a liquidity hub to support BTC trades from other EVM chains, or are the technical hurdles too difficult?

The second question is more of a comment. With each subsequent deployment, price impact needs to be scaled to avoid traders circumventing a higher price impact by splitting their position up into smaller sizes. Limited asset offering, ie only BTC and perhaps Botanix native assets seems to be best solution to this for now, but integrating the Chaos Risk Oracle in some way could perhaps solve some of these issues later on.

In any case, in full support :spider:

2 Likes
5

Genuinely thought about suggesting deployment like this in the past couple weeks as we near deployment of our multichain which inevitably would’ve been a monumental task for our devs as far as time commitment goes.

I am fully behind this suggestion to deploy in the Bitcoin ecosystem as Bitcoin inevitably is what this whole industry spins around and there’s people who want to trade but don’t want to venture into any other crypto for whatever reason. A massive yes.

3 Likes
6

Very good questions, I’d love to hear some more about those aspects as well.

1 Like
7

cool. good idea!!!

2 Likes
8

This seems like a great idea, I support.

I have been focused on the ETH ecosystem and had not been closely following the progress of the Bitcoin L2 development space, so my initial reaction was to ask, why Spiderchain?
What about Stacks, Liquid, Merlin, B² Network or GOAT Network?

I’ve done some initial research and it seems like Spiderchain is the most ideal opportunity for GMX. I’ll share my reasoning for others in a similar position, and encourage the team or any others to add perspective or correct me as needed.

  1. EVM: Only Spiderchain, Merlin and B² are using EVM, so those are the only options for easy deployment of GMX v2 architecture. IMO this is a huge strength for these chains, EMV network effects are massive.

  2. Decentralization: Spiderchain uses Proof of Stake (PoS) consensus layered on Bitcoin. It employs successive multisig wallets managed by orchestrator nodes, which stake BTC as collateral. Roadmap to become a permissionless validator set with slashing. B² uses zk, has a complex modular design which has external DA requirements (potential centralization vector). Merlin is newer, centralized with institutional focus, has a govt token and its 74.9% token lockup raises liquidity concerns. Spiderchain vibes with the GMX ethos.

  3. Traction: Spiderchain leads in BTC L2 EVM ecosystem traction (testnet apps, partnerships like Chainlink, AAVE, ect) by a large margin with with 400,000+ addresses and 2M+ transactions and Mainnet expected in 2025. This could be an Arbitrum moment.

Remaining Questions:

  1. From my non-technical perspective, this appears to be a (relatively) easy implementation. Would love to hear more from the dev team about total resource allocation required and how this impacts the timeline of our multichain roadmap, if at all.
  2. There is an ongoing vote about our Multichain messaging partner. Does Spiderchain support impact that decision?
4 Likes
9

Big yes.

Questions:

  • what is the timeline for deploying on Botanix’s Spiderchain? It is possible to launch by EOY?

  • Does LZ support cross-chain bridging to that L2?

  • What’s the plan for attracting LP’s?

1 Like
10

I vote YES on the proposal to integrate GMX V2 with Botanix Spiderchain. This is a strategic move to enter the Bitcoin DeFi space, expand the user base, enable trading with BTC settlement, and strengthen GMX’s position as a leading DEX. I support initiating the partnership and moving forward with the implementation.

11

All good questions as well.

12

this would be great. I vote in approval.

1 Like
13

While an exact timeline can’t be stated, the testnet is already live and we expect things to progress relatively quickly.

We expect LZ and other bridges to be available

Work in collaboration with Botanix towards the various bitcoin focused liquidity providers they have secured. Contributors are also focusing on showing the Bitcoin yield that is possible.

1 Like
14

We have speced out the technical lift, we feel that between contract deployment, testing, ui updation and risk / security reviews a 3 week window when we commence is a realistic target, but there is always some flexibility in these as moving to new chains can irrespective of compatibility have nuances.

Multichain vote does not impact the deployment, in the starting stage this will be a siloed bitcoin deployment and then gain multichain support as a follow on.

4 Likes