Battle of DEXs: GMX Versus Gains Protocol

In this dashboard, We'll take a look at recent performance of two Perpetual Protocol of GMX (Arbitrum) and Gains (Polygon)

Introduction

Development and progress speed in crypto space is crazy! one year ago DYDX was the pioneer of decentralized exchanges with its classic orderbook marketmaking style and today there are tens of launched and hundreds of developing DEXs with various styles in the landscape, making the competing scene of crypto market very attractive to watch and fun to participate.

Every new blockchain with its inherit solutions to scalability, security and speed make possible new opportunities for developers to realize and practice their financial ideas. Polygon was one of the first and arbitrum was (is) one of the loudest (and most promising) of these solutions. Now, deep in the turmoil of liquidity and user attraction battle, we see GMX and Gains protocols built, up and running, and finding their way to the most important narratives. Let’s see how they performed in their run.

What are we looking to answer?

Popular underlying assets on GMX based on the number of transaction, volume and unique traders
Comparison on GMX and Gains on basic Statistics - Total and Weekly
Basic comparison between various volume categories
Daily & Total Long and Short positions on GMX
GMX and Gains Top Traders based on Volume and their respective number of trades
GMX & GNS tokens impact comparing to their entire ecosystem
Total GMX & GNS impact on their ecosystem
Why Gains might be interested in launching on Arbitrum?

Methodological Notes

I am using FlipsideCrypto database and application to render this analysis.
Arbitrum database of flipside goes back to the date 2022-04-18. In order to make a fair comparison I restricted Gains data to this starting date. In some cases, Gains starting date has been set a few weeks earlier to show a better understanding of trends.
I used polygon.core.fact_event_logs & arbitrum.core.fact_event_logs table to query most of charts below.
I took some Ideas and SQL notes from these two dashboards, I appreciate their great works:

Data & Analysis

Starting from some basic stats, let’s go to GMX first.

One of the advantages on GMX is that opposite to Gains where you only can use DAI to pay for your trades, you are able to use plenty of stable and Non-stable assets as underlying asset to initiate your leveraged position. it simply means that you don’t need to have one specific asset to open a position. But what are the most popular assets based on different metrics?

USDC is the most popular asset to pay with, no matter what the criterion is.
Between Non-Stablecoins, wrapped BTC and wrapped Ether are the most favorite assets.
Frax is the least favorite stablecoin.

GMX shows an obvious victory over Gains in all aspects
All weekly stats indicate how GMX popularity and implementation increased starting from May, while Gains has been struggling in all areas and even experiencing some loss of momentum.
On the last week of June, Number of unique traders on GMX shows a significant growth which is related to third week of Arbitrum oddysey campaign, which led to chain congestion and campaign stop.

It is always interesting to see if there is a difference of user base based on volume of trades. To see such traces I divided transactions of protocols based on the criteria below:

Retail: >=1 & <1000$

Crab: >=1000 & <10000$

Dolphin: >=10000 & <100000&

Shark: >=100000 & <1M

Whale: >1M

Beside from GMX being better in performance in all categories, it is interesting that Sharks and Whales have no representative in Gains protocol! I hope this is not a clear mistake from my end, in this case this may explain why they aim to launch on arbitrum soon!

I Couldn’t find a viable method to query positions direction in Gains.

Even GMX query is strangely limited to past 20 days in this case.

Anyway, seeing how price went up in past week, we now know a lot of users got roasted on GMX!

Top Traders of GMX are more evenly distributed and more close while Gains protocol have two traders with much significant volume than others.

We know that Gains protocol decided to launch on Arbitrum soon. why would they want to do this?

It’s not that hard really. New chain means new capital inflow, more fee generated and more revenue. But why arbitrum?

Let’s explore this question from some aspects.

Ecosystem Impact:

Gains and GMX have governance and utility tokens of their own which both performed exceptionally well in this bear market. Looking at the transactions related to GMX token VS all other arbitrum transactions, and implementing the same criterion for GNS token we can see a huge difference.

It seems that Gains protocol, despite having more assets (more crypto assets + forex and stocks) has a low share of total Polygon market. They clearly see an opportunity in launching on arbitrum to put their product in a better scope. Launching on arbitrum, they will be fighting with much less rivals and for a more potential reward.

GMX products occupy a great share of arbitrum blockspace and Gains protocol clearly is tempted by this opportunity.

Also Arbitrum, comparing to the other famous L2 option, Optimism, shows a more promising future. Even though Optimism has launched their token and launched various campaigns and programs to attract VCs and capitals, still arbitrum attracts more new users.

When we compare their trade volume on two of their main DEXs, we can see that arbitrum keeps a solid and healthy trend while Optimism had lost all its spike and hype after OP launch.

Conclusion

Considering that Arbitrum will launch their token sooner or later, and having in mind that how OP launch have impacted their ecosystem and profited protocols and their users millions of dollars, it is clear that Gains protocol chose the perfect chain at the perfect time to attract the most possible capital to a well build product.

They are planning to come to a ecosystem with less rivals, more promising future, dedicated userbase and more incoming funds! They definitely want to have more volume, more users and more trades. they want to be part of L222 and Arbitrum summer narrative before it’s too late.