User interactions

Basic functionalities

Here we will describe the types of user interactions available in our protocol. They are as follows:

1. Buying GIX

2. Selling GIX

3. Depositing ETH as collateral

4. Withdrawing ETH collateral

5. Rebasing GIX

The first four interactions are available on our platform. The last one is visible on-chain, allowing anyone to trigger it to update the payouts from GIX holders to the liquidity providers in the pool.

Buying GIX

When buying GIX, users must pay in ETH at the current gas price, specifically the on-chain basefee price. By triggering this operation, all smart contracts are updated, and the balances of GIX holders are also adjusted according to the IIRM (Improved Interest Rate Model). Users will receive a corresponding amount of GIX.

It's important to note that during periods of high volatility (characterized by high gas prices) and low collateralization, significant slippage may occur. This is because users are buying at a higher price than the average price the pool can support, which triggers high payouts due to the dynamic and responsive nature of the IIRM.

Selling GIX

When users sell their GIX tokens, the system first calculates the corresponding amount of ETH based on current gas prices. The request is then sent to the pool smart contract, where slippage may occur due to low collateralization of the GIX smart contract.

If the GIX smart contract lacks sufficient collateral in the pool, collateral from other Liquidity Providers (LPs) will be used at a shared loss. This means GIX sellers receive a less favorable price, while LPs incur a small loss to compensate for the missing capital.

As a result, depegging may occur depending on market conditions. However, according to statistics, this is expected to happen less than 1% of the time.

Deposit ETH Collateral

Users can simply choose to deposit collateral into the main pool. By doing so, they receive shares in the pool which accrue value over time due to fees and payouts from GIX holders. However, note that there may be short-term losses during periods of high market volatility. The system has been tuned to aim for net gains over a year, but you should be aware of the risk of capital loss. This is not financial advice.

Withdraw ETH Collateral

When you are ready to withdraw your liquidity, the system calculates the portion of ETH in the pool that belongs to you based on the shares you hold.

Rebase GIX

Rebasing of GIX occurs every time there is a change in the state of the smart contract, i.e., when buying, selling, depositing, or withdrawing collateral. However, during periods of low interaction, anyone can trigger a rebase of the GIX supply in circulation by initiating this interaction.