GMX launches an ETH-USD [wstETH-USDe] market on Arbitrum, supported by Lido’s wstETH & Ethena’s USDe tokens
The new ETH-USD [wstETH-USDe] market on GMX V2 is backed by bridged wstETH and USDe tokens, offers spot and perpetual futures trading, and is enabled by Chainlink Data Streams.
GMX is excited to announce the listing of two popular revenue-earning assets on Arbitrum: wrapped staked ETH from Lido (wstETH) and the synthetic dollar USDe from Ethena Labs. The two assets will back an ETH-USD perpetual futures market on GMX V2, opening up unique DeFi possibilities.
The new ETH-USD [wstETH-USDe] market provides DeFi users with opportunities for swapping, margin trading, hedging, earning Ethena points, and earning fees from providing liquidity. Through this listing, GMX underscores its commitment to offering the best earning opportunities, and the most liquid on-chain trading markets for all top crypto assets.
The new market is made possible by the recent launch of GMX V2.1, which has made pull-based price oracles from Chainlink Data Streams for wstETH and USDe available to GMX. These low-latency Data Streams provide GMX users with sub-second pricing updates and fast on-chain transaction execution while reducing reliance on RPC servers, which improves UX, protocol security, and decentralisation.
Liquidity, bridging & market parameters
As an ETH-USD [wstETH-USDe] market, this innovative synthetic market for trading Ethereum perpetuals uses wrapped staked ETH from Lido and USDe from Ethena as its supporting assets on the long and short side.
Traders can go long or short on ETH/USD, choosing to use either wstETH or USDe as their collateral. This configuration boosts capital efficiency. They can also hedge in new ways, and earn on their collateral while waiting for the right trade opportunity. Liquidity providers, too, are now able to leverage these two leading fee-earning collaterals on GMX. Funding farmers will be able to benefit from high-earning delta-neutral positions.
Bridging USDe
USDe tokens can now be bridged to Arbitrum through Stargate. Click here to bridge your USDe tokens and benefit from early GM pool liquidity incentives.
All liquidity in the wstETH-USDe GM pool will directly be eligible for 20x Ethena points. Note that Sats will accrue on the full LP amount, not just the USDe part.
Bringing this popular DeFi asset over to the Arbitrum blockchain allows GMX to support a liquid spot trading market for USDe as well. Due to GMX’s composability, partners in the Arbitrum ecosystem will be able to build added-value instruments on top of this USDe liquidity.
Bridging wstETH
A significant amount of wstETH liquidity is already available on the Arbitrum blockchain. Users can also click here to bridge their wstETH tokens to Arbitrum via the canonical Arbitrum bridge.
Early liquidity providers to the [wstETH-USDe] GM pool backing the new ETH-USD market will benefit from ARB incentives to bootstrap sufficient market liquidity quickly. These ARB rewards are in addition to the wstETH staking rewards, 20x Ethena Sats, and GMX's pool fees.
Chaos Labs, a core security partner, has provided technical recommendations for the new assets’ initial listing parameters on the GMX Governance forum.
Synthetic & fully-backed GMX markets
Note that GMX V2 offers both synthetic markets and fully asset-backed GM markets. An example of a fully-backed market is the current ETH-USD perpetuals market backed by ETH-USDC, where the open interest is limited to the total amount of ETH and USDC tokens in the pool.
An example of a synthetic market is the existing DOGE/USD perpetuals market backed by ETH-USDC. Here, open interest limits are set more conservatively, as the price increase of DOGE might outpace that of its backing ETH in certain scenarios. Nonetheless, GMX’s design ensures that markets are always solvent and all traders’ profits at the time of closing can be fully paid.
The new ETH-USD [wstETH-USDe] market is a unique type of synthetic market due to the strong correlations between ETH and wstETH, and USD and USDe.
Please review the protocol documentation about GMX V2's varying market types to learn more about the differences between synthetic and fully-backed markets.
Understanding wstETH & USDe
Lido's wstETH is a wrapped, liquid version of stETH (staked ETH), optimised for use in DeFi. Due to how Lido works, the amount of stETH on a user’s balance is not constant – it changes daily as staking rewards come in. wstETH keeps a user’s balance of stETH fixed and uses an underlying share system to reflect staking rewards.
USDe is a synthetic dollar issued by Ethena Labs, which aims to provide a stable and scalable digital currency that mirrors the value of the US dollar. USDe is minted using BTC, ETH, ETH LSTs, and USDT as collateral, which is hedged on centralised exchanges while accruing rewards from positive funding rates.
About Lido
Lido is a liquid staking protocol backed by industry-leading staking providers that supports staking for Ethereum and Polygon. Lido lets users stake their tokens whilst participating in on-chain DeFi activities.
About Ethena
Ethena enables the creation and redemption of a delta-neutral synthetic dollar, USDe.
The mechanism backing USDe enables the first "Internet Bond" offering a crypto-native, value-accruing, dollar-denominated instrument, derived from staked asset returns and the funding and basis spread available in perpetual and futures markets.
About Chainlink
Chainlink is the industry-standard decentralized computing platform powering the verifiable web. Chainlink has enabled over $12 trillion in transaction value by providing financial institutions, startups, and developers worldwide with access to real-world data, offchain computation, and secure cross-chain interoperability across any blockchain. Chainlink powers verifiable applications and high-integrity markets for banking, DeFi, global trade, gaming, and other major sectors.
Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link.
Connect With GMX:
Website: https://gmx.io/
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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.
These new collateral options are great imho