gTrade v6.4 — Guaranteed Execution, Borrowing Fee Updates, and Rollover Fee Deprecation
Welcome, gTraders!
As always, development has been in full swing. Over the last quarter, gTrade v6.3.1 (NFT bot optimizations) and v6.3.2 (borrowing fees) have been integrated into the platform, as well as a range of other upgrades.
Community engagement has also been a major focus. The $100k King of the Hill trading and meme contests were both successes, bringing hundreds of new traders onto the platform.
If you’ve been busy and missed the highlights, make sure to check out gTrade’s June recap article.
Now, onto the next exciting announcement!
After months of development and testing, gTrade’s long-awaited v6.4 (lookbacks) upgrade has been deployed. The 2-week timelock was initiated on July 24th, paving the way for a successful mainnet launch on August 7th!
Lookbacks are an innovative order execution model developed by & exclusive to gTrade’s oracle architecture. They not only rectify missed orders and minimize latency but also guarantee the execution of all orders — a capability not possible on any (centralized or decentralized) order book platform!
The v6.4 upgrade also brings optimizations of the borrowing fee formula and the removal of rollover fees.
To best understand the benefits of lookbacks, let’s first break down the issues at hand with current trading systems — and then detail the solutions offered by the v6.4 upgrade.
Issues with Other Platforms
- Missed Limits/Stop/SL/TP Orders: Resulting in unfair execution and risk for traders.
- Missed Liquidations: Increasing risk for the platform and, by extension, LPs & token holders.
- Slippage & Partial Fills: Due to latency, inherent market volatility, or liquidity constraints, orders might be executed at less-than-ideal prices.
- Missed Triggers: Leading to wasted $LINK tokens or unnecessary gas fees for NFT bots.
Given the inherent design of blockchains and the reliance on oracles for real-time data, a certain degree of latency is inevitable. Periodic block times, coupled with potential oracle inefficiencies, can introduce inefficiencies.
Lookbacks were developed by gTrade as a solution to the inherent challenges of blockchain trading, particularly latency and slippage.
Understanding the Benefits of Lookbacks
So, what exactly are lookbacks?
Lookbacks, implemented through gTrade’s advanced oracle system, enable the platform to retroactively review recent price data instead of only relying on current price data.
Retroactive price checks enable the following key UX advantages:
- Guaranteed Orders: gTrade guarantees that all limit, stop, sl, and tp orders are executed at the trader-determined price. The only exception is market gaps during open/close times. In such scenarios, it uses the first market price available post-gap.
- Universal Protection: Previously, only gTrade’s cryptocurrency stop-loss orders had guaranteed protection. Now, with lookbacks, there’s protection for all trading pairs and every order type.
- 0-Slippage Market Orders: In v6.4, market orders use the exact price from the transaction’s timestamp, eliminating the slippage previously caused by oracle latencies that relied solely on the current price.
- Guarding Against Volatility and Chain Disruptions: Lookbacks ensure that orders are executed at the right price, even during periods of chain congestion or potential chain downtime, safeguarding traders from missed orders and volatility.
- Free Stop-Loss Updates: Prior to v6.4, oracles verified that updated stop-losses were correctly positioned relative to the price (e.g., below the price for long positions), resulting in a 0.015% fee for every SL modification. With the new system, if the price is on the incorrect side, it’s treated as if it passed through the order and is executed at the market rate. This eliminates the need for the prior check. Consequently, all SL updates are now cost-free!
Through these benefits, lookbacks provide a smoother user experience, enhance the security of gTrade’s platform, and ensure the efficiency of its infrastructure.
Additional v6.4 Updates
While the spotlight remains on lookbacks, the gTrade v6.4 upgrade is not limited to this advancement. It also includes refinements and optimizations to the borrowing fee formula and the removal of rollover fees.
- Support for Exponent in Borrowing Fees: This revised approach applies higher fees for larger net exposures and, conversely, provides reduced fees for smaller exposures. The goal is to further increase risk management for high exposures while encouraging trading activity by making it more affordable at low exposures. Currently, only whole number exponents (e.g. 2) are supported. This change will be enabled once decimal exponents are supported (e.g. 1.3).
- Change in exposure formula: In the v6.4 update, the $gDAI vault market cap component has been substituted with max OI for a more accurate and intuitive borrowing fee calculation. The maximum APR returned by the borrowing fee formula now corresponds to the APR at 100% net exposure (net OI = max OI).
- Deprecated rollover fee: This holding fee charged on the collateral of trades over time is now deprecated. It was introduced when the only other holding fee was the funding fee which was entirely going to traders on the other side, resulting in 0 revenue going to the vault for risk management. The new borrowing fees solve this, making the rollover fee redundant (now set to 0).
Updated borrowing fee formula (exponent = 1 for now):
Previous: max apr * (net OI / vault market cap)
New: max apr * (net OI / max OI)^exponent
Wrapping Up
gTrade’s v6.4 upgrade is now live on the platform’s Arbitrum and Polygon networks. The lookbacks feature – exclusive to gTrade – uses recent price data to guarantee all order execution, whether immediate or retroactive.
Lookbacks not only rectify missed orders – they also guarantee the price of the order and reduce latency by up to 1 second!
Additionally, v6.4 removes rollover fees while refining the borrowing fee formula.
Enjoy the updates and happy trading! 🫡
