GMX launches a BTC-USD market backed by tBTC, the decentralised Bitcoin-backed token from Threshold Network
The new BTC-USD [TBTC] market on GMX V2 on Arbitrum is backed by a single-asset tBTC liquidity pool. Early liquidity providers to the tBTC GM pool will benefit from bootstrap incentives.
GMX is introducing tBTC as a collateral asset on Arbitrum, offering users a trust-minimised alternative to wrapped BTC (wBTC). The decentralised token from Threshold Network that’s pegged to the price of Bitcoin will back a BTC-USD perpetual futures market on GMX V2.
GMX aims to offer the best on-chain earning opportunities in crypto, and the most liquid on-chain trading markets for all top crypto assets. Values like permissionlessness, decentralisation, and transparency infuse that vision. The introduction of the tBTC token allows GMX to further deepen its alignment with these core DeFi values.
Benefits of tBTC markets to GMX users
Further decentralisation and trust minimisation
Direct BTC on and off-ramps to GMX products via the tBTC SDK
tBTC native minting on Arbitrum
A higher return for BTC liquidity providers due to long-term tBTC incentives
tBTC Incentives Program
Threshold DAO has committed to an initial three-month incentive program to bootstrap tBTC collateral deposits on GMX:
Month 1: $15k USD denominated in the $T token & 6,666 ARB
Month 2: $15k USD denominated in $T token & 6,667 ARB
Month 3 $15k USD denominated in $T token & 6,667 ARB
Once this launch program has concluded, Threshold DAO will review the campaign's success and assess a follow-up long-term incentives budget.
Market Parameters
The new market is a BTC-USD [TBTC] market. This means it is a market to trade Bitcoin against USD, backed by a single-token pool containing only tBTC tokens. tBTC is the backing asset on both the long and short sides in the underlying liquidity pool.
This configuration is similar to GMX’s existing single-asset BTC-USD [WBTC] market, based on wrapped BTC. Both markets are backed solely by Bitcoin, and have no stablecoin component in the liquidity pool. They, therefore, don’t feature the rebalancing and impermanent loss that occurs in traditional liquidity pools.
Technical recommendations for tBTC’s initial listing parameters were provided by Chaos Labs to the GMX DAO.
Liquidity & Bridging
tBTC can be natively minted on the Arbitrum blockchain as of this week. Users can also bridge their Bitcoin to Arbitrum via Threshold Network’s portal. Additionally, various liquid spot trading markets for tBTC are available on Arbitrum as well.
Liquidity providers can deposit tBTC to support trading on GMX, and maintain full market exposure to Bitcoin while earning a significant return on their holdings.
Early liquidity providers to the tBTC GM pool backing the new BTC-USD market will benefit from ARB incentives, to help bootstrap market liquidity quickly. See the abovementioned tBTC Incentives Program for details.
Providing Liquidity to a GM pool
As a GM liquidity provider in any of GMX’s single-asset or dual-asset (token/USDC) liquidity pools, you are:
exposed to the price movements of the underlying asset(s)
exposed to trader PnL, as long as the pool isn't precisely 50:50 balanced between Longs:Shorts. Funding rates generally bring the pool back to balanced Open Interest, resulting in minimal effect on LPs from trader PnL
earning fees from market making, swap fees and leverage trading at the pool’s listed rate (estimates based on the past seven days’ performance). These fees are auto-compounded into the pool, automatically increasing the price of your GM tokens
earning additional rewards from liquidity incentives, when such a campaign is ongoing
About tBTC & Threshold Network
tBTC is a Bitcoin-backed token pegged 1-to-1 to the price of Bitcoin. It allows holders to use Bitcoin on the Ethereum and EVM blockchains and access the DeFi ecosystem. Users can obtain tBTC by depositing BTC into a wallet through the tBTC dapp on the Bitcoin blockchain, or swapping for tBTC on various decentralised exchanges.
tBTC is an open-source project developed by Threshold Network. Threshold is a set of protocols, and the node operators that back them, aiming to offer a full suite of decentralised threshold cryptography services.
Threshold cryptography protects data by distributing operations across a network of independent nodes. This simple idea increases security and availability and reduces reliance on trusted parties. Threshold Network DAO was born out of the first on-chain merger between two decentralized protocols, Keep Network and NuCypher.
Join the GMX community:
Website: https://gmx.io/
Twitter: https://twitter.com/GMX_IO
Telegram: https://t.me/GMX_IO
Announcements: https://t.me/GMX_Announcements
Discord: https://discord.gg/H5PeQru3Aa
Github: https://github.com/gmx-io
Documentation: https://docs.gmx.io/
Disclaimer
This announcement is for informational purposes only and does not constitute legal, financial, or investment advice. GMX or any other parties make no warranties or representations regarding the accuracy, completeness, or suitability of the information presented and will not be liable for any losses, damages, or adverse consequences that may arise in relation to this announcement.
It is strongly advised to undertake your own due diligence and seek advice from relevant professionals before making decisions based on this announcement.
Nice.