GMX would stand out by having some RWAs on the platform that yield with trades. But what is the next step? can anyone step up and create a proposal for us to vote?
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Hi Snail,
Welcome to the GMX forums! This is a definitely interesting proposal, will share some insights on this. Thereās an emerging presence of RWA interest especially with tokenised markets, including from Backed Finance and Swarm which offer SPX and tokenised equity products all on-chain. In this same sphere thereās broader interest into commodities like Paxosās Gold, Tetherās Gold, and many more providers, which make up more than $1 billion in Market Capitalization. With this proposal, the benefits I see are:
Personally would like to see commodities like Gold in GMX.
Introduce a New Asset Class
Onboarding new asset for traders and liquidity providers to broaden their exposure to the market. Itās very clear thereās a big shift in the movement of interest towards these commodities on a tokenised level, if GMX parallel can offer such solutions for traders, it would greatly improve this emerging ecosystem.
Concerns
However moving to the segment of market interest in perpetuals landscape, the issue I see with launching the S&P 500:
Regulatory Hurdles
As many have brought light, having derivatives of the like of the S&P500 on GMX may have more scrutiny from regulators.
Lack of interest
Drawing from past experiences, Gains Network had both indices (which included SPY and QQQ) for over a year on their derivatives platform, however sunsetted this recently due to both regulatory concerns, lack of volumes, and the highest upkeep from their platform, made at most 2.3% of volume share in a single week, and 0.4% of volumes in 2023 (Ref Query).
This would make sense for most investors as these indices usually act as a benchmark, and donāt often experience high volatility in most trading days.
Final Thoughts
That being said, as @Seraph shared coinciding with this proposal, Chainlink offering more feeds including commodities including Gold, Silver, and Crude Oil, indicates that there is growing interest. Thanks for sharing this proposal @snail, looking forward to further discussions!
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Thanks for the insight! Although I would love to see the S&P500, I believe we should start with Gold and Silver. With the Chainlink feeds, it is the right time to make a move.
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definitely gold, silver and oilā¦ commodities are a lot easier than stocks.
lets do it the safe way
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We are in favor of introducing Gold and S&P 500 Markets to GMX, particularly with an initial focus on Gold. This move is aligned with GMXās vision to diversify trading options and attract a broader user base by tapping into traditional financial assets. Hereās why we believe this is a strong step forward:
Key Points:
- Chainlink as a Demand Beacon: Chainlink can serve as a valuable indicator by tracking which assets are being added to its data streams. This can signal which traditional assets (like tokenized Gold) are gaining traction in DeFi markets, providing GMX with strong demand signals and helping prioritize which assets to onboard. By following Chainlinkās data streams, GMX can stay ahead of demand and integrate assets that have clear market interest.
- Regulatory Alignment with Trustworthy Issuers: We recommend aligning with trusted token issuers for assets like tokenized Gold. This partnership approach will help GMX navigate potential regulatory challenges more smoothly, ensuring that tokenized assets are compliant and secure, reducing potential hurdles as the platform expands into non-crypto markets.
- Dual Use as Collateral: Beyond offering these assets for trading markets, we see an opportunity to use Gold and similar assets as collateral options. Gold, with its historical stability as a store of value, can serve as a powerful collateral asset within the GMX ecosystem, benefiting both liquidity providers (LPs) and traders. This will enhance flexibility and allow users to leverage these assets in multiple ways.
- Sustainable Growth & Liquidity: Expanding into traditional financial markets, especially with a focus on non-crypto assets, will help attract new users and deepen liquidity on the platform. It also aligns with GMXās long-term vision of diversifying revenue sources, positioning GMX as a leading multi-asset platform.
While we support both assets, we recommend starting with Gold as it presents fewer regulatory concerns and could quickly gain traction. Integrating the S&P 500 will require more careful consideration of liquidity provisioning and regulatory compliance due to its complexity.
Overall, by focusing on regulatory alignment, leveraging Chainlinkās signals, and expanding asset utility into collateral, this proposal sets GMX up for long-term growth and success.
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man, we canāt wait for GMX to link to gold!
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Hey folks, the RWA feeds, including gold, silver and WTI will be out soon.
Do keep in mind, these are based on the TradFi markets which close during off-market hours. Its very important that GMX handles this correctly and doesnāt expose LPs, which will likely require contract changes to temporarily open/close the market.
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This was discussed for almost 5 months. Obviously, thereās an interest in Gold market. Shall this be finally proposed for a vote?
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discussion must be accompanied by the correct tools, the previous comment took note that the RWA feeds are coming soon, but NOT yet available now.
Also, the devs have lots of work to ensure that the RWA trading will have to take into account off-market hours (such as weekends and USA bank holidays) does not pose a risk to Liquidity Providers in GMX
Its not so straightforward, so I believe the contributors are eager for GOLD listing, just need lots of work once the price feed is up =)