# Overview What is GoldLink Protocol? GoldLink Protocol is an institutional-grade on-chain prime brokerage that facilitates trustless, undercollateralized lending. The protocol aims to allow borrowers to execute a wide range of on-chain high-yield trading strategies while maximizing capital efficiency through leverage provided through individual strategy lending pools. By creating 1:1 relationships between strategies and lenders we are able to maximize transparency for both lenders and borrowers. Lenders on the platform will only ever have exposure to protocols and strategies they have allocated explicitly to. For borrowers, the protocol can effectively offer the ability to run trading strategies as they would in-house, with leverage to amplify their returns. As GoldLink continues adding strategies, the protocol will establish itself as a best-in-class prime brokerage solution catering primarily to institutional borrowers. It will do so while providing lenders with competitive, risk-adjusted returns and fully transparent and quantifiable risk. Ultimately, GoldLink exists to offer CeFi-level experience and polish from the trustless context of an on-chain protocol. # Official Links Website: [https://goldlink.io/](https://app.goldlink.io/) App: Twitter: Discord: Telegram: Blog: # Deposit Lenders deposit capital into an individual strategy pool similar to traditional liquidity (ERC-4626) pools. Lenders can access the deposit module from the lending homepage and the strategy details page.
Within the deposit module, lenders will be able to view their USDC wallet balance, details of their transactions, and expected returns. Once a lender has deposited funds, they will begin accruing yield as assets are deployed by borrowers.
Within the strategy details, lenders will have access to detailed information on the respective strategy, including TVL maximums, utilization, and historical returns.
# Withdraw Lenders can withdraw funds from the lending pool at any point when there is idle capital in the pool. Users can view the interest rate model chart within the strategy details dashboard to view available capital within the strategy.
Lenders can access the withdrawal module from the lending homepage and the strategy details page.
# Strategy Insights On the strategy details page, lenders will be able to view detailed insights on the historical performance, risks and architecture of each strategy. For additional information, users can view the strategy whitepaper whitepaper in the risk docs. [Risk](/risk/risk-scoring-criteria) ### Historical APY
### Utilization
### TVL
### Interest Rate Model
### Deployment
### Risk Score
# Insurance Insurance is a safety measure designed to offer more protection to lenders in the event of a default. Each borrower pool has an insurance account. On every block, a governance approved percentage of the pool's interest is diverted to the insurance account. Initially, this amount will be set by the GoldLink Team, but this can be modified via governance in the future. The current approved parameter for insurance is 5% for liquidations and # Funding Account Strategies on GoldLink are both flexible and secure. Borrowers can see available capital in each strategy and borrow a multiple of their collateral. Borrowers are able to manage their loans and positions in the borrower dashboard.
After clicking "Deposit" within the strategy page, borrowers will be able to fund their strategy account and view updated account details.
# Deploying Position Borrowers are able to take leverage positions within a strategy, representing a multiple of the collateral they have deposited into their strategy account. A borrower's loan size is limited to the size of the open positions they currently have deployed in the strategy.
After depositing collateral, borrowers send transactions through the Prime Broker account, specifying the deployment of borrowed capital into a strategy. If the action the borrower takes does not meet the strategy's criteria, it will revert.
# Managing Loan ### Coming Soon # Managing Position Within the dashboard, borrowers will be able to monitor their positions, loans, and profit, as well as relevant information on the protocols the strategy engages in. Users can use the interface to quickly update positions and adjust the size of their loans.
# Claiming Profit If the strategy’s withdrawal conditions are met, borrowers can claim profit while a position is live. This can be done natively through the platform, sending any position profits and additional awards to the specified wallet.
# Health Factor Users can understand their loan health and collateral requirements by viewing the Strategy Account Health Factor. The Health Factor is located in the Strategy Overview module at the top of each Strategy Details page:
Health Factor is a ratio that assesses the risk of a borrower's position, with higher values indicating a safer margin against liquidation. Calculated as collateral - loss / loan. At6 times loan to value, an account will be liquidated. Profit does not factor into Health Factor nor does it mitigate liquidation risk.The health factor percentage indicates the overall health status of your active loan, which can change based on your open positions and their collateral requirements. # Liqudidations If an account’s health score falls below the liquidation threshold, then individual loans are liquidated. Liquidated funds are then paid back to the lending pool, using the borrower’s collateral. Any remaining collateral will remain in the borrower’s control. # GMX Funding Rate Farming Delta-Neutral GMX Funding Rate Farming capitalizes on the unique dynamics of funding rates in perpetual contracts. Funding rates ensure alignment between futures and spot prices, allowing traders to leverage without directional exposure. **Unlocking Yield Through Funding Rate Farming** Funding rate farming takes advantage of skewed open interest on perpetual DEXs, allowing traders to earn consistent yield without assuming directional risk. By strategically leveraging funding rates, traders can optimize their returns within the DeFi landscape. **The Mechanics of GMX Funding Rate Farming** On GMX, GoldLink borrowers have the opportunity to farm funding rates by deploying short positions when long open interest surpasses short open interest. Leveraging GoldLink's borrowing capabilities, borrowers can access additional capital from the lending pool to deploy short positions, fully collateralized by spot positions in the same market. This innovative approach effectively mitigates directional exposure while maximizing yield potential. # Strategy Overview GoldLink's inaugural strategy, GMX Funding Rate Farming, capitalizes on the unique dynamics of funding rates in perpetual contracts. In essence, funding rates ensure alignment between futures and spot prices, allowing traders to leverage without directional exposure. On GMX, GoldLink borrowers have the opportunity to farm funding rates by deploying short positions when long open interest surpasses short open interest. Leveraging GoldLink's borrowing capabilities, borrowers can access additional capital from the lending pool to deploy short positions, fully collateralized by spot positions in the same market. This approach effectively mitigates directional exposure while maximizing yield potential. # GMX Funding Rates When Long OI exceeds Short OI on GMX, long positions will pay short holders. If the hourly funding fee is .005% per hour, short holders will earn 50% APY on their positions and any additional incentives the platform provides.
You can learn more about funding rates on GMX in their documentation here: # Price Impact Price impact is the change in the price of an asset that occurs as a result of a trade. It's determined by the size of the trade relative to the available liquidity, as well as other factors like order book depth and the swap protocol's algorithm. In our GMX Funding Rate Farming strategy, price impact can be positive or negative depending on the long/short liquidity balance in the market you are trading in and the timing of the trade. If the trade improves the long/short balance, then there would be a positive price impact; otherwise, there would be a negative price impact.
For swaps, a positive price impact would increase the number of tokens received, while a negative price impact would decrease the number of tokens received. When trading on GoldLink, users can take advantage of favorable price impact to best time market entry and improve
We account for this change in market price when launching a position, ensuring that a user's perpetual/spot position remains balanced despite positive or negative price changes and is delta-neutral. To help users understand how this may affect their positions, we’ve added price impact predictions to the trading interface and charts illustrating GMX liquidity balance. These tools provide another indicator traders can use to find the best time to enter an exit position on GoldLink.
# Execution Price The execution price in the GMX Funding Rate Farming strategy is the costs associated with opening/ closing a position and depositing/withdrawing collateral into the upstream protocol. # Video Walkthrough {% embed url="" %} # Risk Scoring Criteria **Protocol Risk** This score measures the security risk associated with the upstream protocol(s) the strategy interacts with based on the measures the protocol has taken to test and ensure the security of their contracts thoroughly. Inputs include the credibility of auditors, Lindy factor, and bug bounty programs, among other considerations. | Score | Criteria | | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | 1 | The protocol is less than one year old. No audit by a trusted firm or security researcher. | | 2 | The protocol is less than one year old. Has been fully or partially audited by a security firm or researcher and taken additional steps to ensure security (i.e. bug bounty, Sherlock) | | 3 | The protocol is less than one year old. Has been fully audited by a trusted security firm or researcher or taken additional steps to ensure security (i.e., bug bounty, Sherlock) | | 4 | The protocol is more than one year old. Has been fully or partially audited by a security firm or researcher, or taken additional steps to ensure security (i.e., bug bounty, Sherlock) | | 5 | The protocol is more than one year old. Has been fully audited by a trusted security firm or researcher and taken additional steps to ensure security (i.e., bug bounty, Sherlock) | **Complexity** The complexity score is determined by both the complexity for a trader/borrower to execute the strategy successfully and the amount of intervention necessary to avoid experiencing loss. It takes into the intricacies of understanding the strategy, historical backtesting, and the likelihood of liquidation. | Score | Criteria | | ----- | ------------------------------------------------------------------------------------------------------------------------- | | 1 | The Strategy is easy to understand and execute, requiring minimal borrower intervention. | | 2 | The strategy is easy to understand and execute. It requires occasional borrower intervention to prevent loan loss. | | 3 | The strategy is fairly complex and requires frequent borrower intervention to prevent loan loss. | | 4 | The strategy is complex and requires frequent intervention to prevent liquidation. | | 5 | Strategy is highly complex, with a high likelihood for liquidation without continual borrower oversight and intervention. | **Longevity** This score measures the length of time a strategy has been active on GoldLink without incident. | Score | Criteria | | ----- | --------------------- | | 1 | Less than 1 month | | 2 | Greater than 1 month | | 3 | Greater than 3 months | | 4 | Greater than 6 months | | 5 | Greater than 1 year | **Liquidity Risk** Liquidity risk looks at the utilization and diversity of the lending pool. High utilization will result in higher borrower/lender APR and may also prevent lenders from fully withdrawing capital from the pool until active borrow positions are closed and capital is returned to the pool. As the | Score | Criteria | | ----- | ----------------------------------------------------------- | | 1 | Greater than 95% utilization or <3 wallets hold +90% of TVL | | 2 | Less than 95% utilization or <5 wallets hold +90% of TVL | | 3 | Less than 90% utilization or <10 wallets hold +90% of TVL | | 4 | Less than 75% utilization, <10 wallets hold +75% of TVL | | 5 | Less than 50% utilization, <10 wallets hold +50% of TVL | TVL Risk The TVL looks at the total amount of loaned capital actively engaged in the strategy. Lower TVL strategies have a higher chance of being fully recompensed in the case of loans loss or exploits. | Score | TVL Impact | | ----- | ------------------- | | 1 | Greater than USD 5M | | 2 | Less than USD 5M | | 3 | Less than USD 2.5M | | 4 | Less than USD 1M | | 5 | Less than USD 500K | # Interest Rate Models GoldLink allows Lenders users who deposit capital into strategies to earn interest automatically. Interest is calculated based on the utilization of funds within the lending pool. This calculation uses a kinked rate slope model with an optimal utilization rate of 90%. Borrowers on GoldLink can take out loans against their collateral within individual strategy accounts. The interest rate is calculated as follows largely borrowing from [AAVE](https://docs.aave.com/risk/liquidity-risk/borrow-interest-rate).
Given the above kinked slope curve, we find that rates for borrowers increase as pool utilization increases up to the point of optimal utilization. After that point, the rates increases significantly in order to incentivize proper liquidity balance.
# Leverage Leverage levels for Goldlink’s strategies are calculated based on backtesting of strategy performance and risk factors associated with the strategy and protocol. Based on initial position size, we model liquidation events across all available assets to determine conservative leverage levels that will guarantee a non-negative impact on a borrower’s collateral, provided their position is closed by Goldlink. The model outputs across currently available assets are as follows:
StrategyMax Open LeverageMax Leverage
GMX Funding Rate Farming4x5x
# Insurance Insurance is an additional safety measure designed to offer more protection to lenders in the event of a default. The insurance fund will maintain pools of capital per strategy to allow for greater strategy diversity and risk isolation. Additionally, the insurance fund will grow by taking a percent of the borrow cost and liquidation premiums, so the most risky and high-yield strategies should also have the largest funds. In the event of a default, the insurance fund will automatically be dispersed to lenders attempting to make up for any loan loss. The current insurance premium on borrows and liquidations is 5% and 7.5% respectively. # Protocol Audits {% embed url="" %} # Strategy Audits {% embed url="" %} # Bug Bounty Read to learn more about the GoldLink Bug Bounty Program and how to submit a report. [Submit Report](mailto:security@goldlink.io?subject=GoldLink%20Bug%20Bounty%20Report) GoldLink Protocol is an undercollateralized on-chain prime brokerage, which allows lenders to take on exposure to protocols and strategies they have specifically allocated to and borrowers to effectively run trading strategies as they would in-house, with leverage to amplify their returns. For more information about GoldLink, visit [**https://www.goldlink.io/**](http://goldlink.io/)‍ To use the Dapp, please visit [**app.goldlink.io/**](http://app.goldlink.io/)‍ To view the documentation visit [**docs.goldlink.io/**](http://app.goldlink.io/)‍ To view the dev docs visit [**dev.goldlink.io/**](http://app.goldlink.io/)‍ ## Overview The security of GoldLink Protocol and its smart contracts are of utmost importance to us. For that reason we have established the GoldLink Bug Bounty (the ”Program”) to incentivize responsible bug disclosure.Rewards will be allocated based on the severity of the bug disclosed and assets at risk. Rewards can be up to **50,000 USDC.** ## Scope The Program includes vulnerabilities and bugs in any deployed GoldLink contract. These include those within the following GitHub repositories: * Core Contract Code * GMX Strategy Contract Code However if you find a bug in a GoldLink smart contract outside of these repositories, where user funds are at risk, the team will consider the issue to be in-scope for our bounty. ## Rewards The Program includes the following 4-level severity scale: * **Critical**: Issues that could impact numerous users and have serious reputational, legal or financial implications. An example would be being able to lock contracts permanently or take funds from all users. * **High**: Issues that impact individual users where exploitation would pose reputational, legal or moderate financial risk to the user. * **Medium**: The risk is relatively small and does not pose a threat to user funds.**-** * **Low:** The issue does not pose an immediate risk but is relevant to security best practices. Rewards will be given based on the above severity as well as the likelihood of the bug being triggered or exploited, to be determined at the sole discretion of GoldLink. ## Eligibility To be eligible for a reward under this Program, you must: * Discover a previously unreported, non-public vulnerability that is not previously known by the team and is within the scope of this program. * Be the first to disclose the unique vulnerability to [**security@goldlink.io**](mailto:security@goldlink.io?subject=GoldLink%20Bug%20Bounty%20Report), in compliance with the disclosure requirements. * Provide sufficient information to enable our engineers to reproduce and fix the vulnerability. * Not exploit the vulnerability in any way, including through making it public or by obtaining a profit (other than a reward under this Program). * Not publicize a vulnerability in any way, other than through private reporting to us. * Make a good faith effort to avoid privacy violations, data destruction, and interruption or degradation of any of the assets in scope. * Not submit a vulnerability caused by an underlying issue that is the same as an issue on which a reward has been paid under this Program. * Not engage in any unlawful conduct when disclosing the bug to [**security@goldlink.io**](mailto:security@goldlink.io?subject=GoldLink%20Bug%20Bounty%20Report), including through threats, demands, or any other coercive tactics. * Be at least 18 years of age or, if younger, submit your vulnerability with the consent of your parent or guardian. * Not be subject to US sanctions or reside in a US-embargoed country. * Not be one of our current or former employees, or a vendor or contractor who has been involved in the development of the code of the bug in question. * Comply with all the eligibility requirements of the Program. ## Terms By submitting your report, you grant GoldLink Protocol any and all rights, including intellectual property rights, needed to validate, mitigate, and disclose the vulnerability. All reward decisions, including eligibility for and amounts of the rewards and the manner in which such rewards will be paid, are made at our sole discretion. The terms and conditions of this Program may be altered at any time. # Branding ### Coming Soon # FAQ #### How does the first strategy work? Borrowers put up collateral and receive a loan in excess (up to 4x) their collateral. The loan goes into their prime broker smart contract. Borrowers then can create, increase, and decrease positions on GMX in whitelisted markets. When increasing a position, the loan asset (USDC) is swapped for long token on GMX and then used to collateralize a 1x short. When decreasing, after closing the portion of the position, the long token is sold back for loan asset. Borrowers can swap assets in their prime broker that aren’t USDC and either harvest profit after repaying or at any point as long as a margin is maintained beyond the size of the loan. #### **How can borrowers use loans?** After selecting a strategy, borrowers can establish a loan within the strategy account and deploy a leveraged position. Each strategy comprises a set of predefined actions borrowers can perform with their loaned assets (e.g., Delta Neutral Funding Rate Farming). The strategy contract will continually monitor positions to ensure they adhere to the strategy's parameters. #### What is the lending experience? Similar to Aave, lenders put in capital and receive an ERC20 representing their portion of the lending pool. The pool accrues yield continuously, and when lenders burn their ERC20, they will receive more capital back than they lent unless there are no borrowers or there is loan loss. #### **How are lender and borrower interest rates calculated?** GoldLink currently calculates interest rates using a kinked rate-slope model. The interest rates will adjust in line with the lending pool's utilization rate. #### **Is there an insurance pool?** Each GoldLink strategy has a dedicated insurance fund. The insurance fund grows by taking a percent of the borrow cost and liquidation premium, ensuring that insurance reserve size correlates with the associated strategy risk. #### **How are funds on the platform secured?** GoldLink has taken several steps to mitigate the risks typically associated with undercollateralized lending. Each strategy continuously tracks all loaned assets and positions, rebalancing or closing any positions that do not remain within the strategy's predefined criteria. Additionally, if a strategy account’s health score falls below the liquidation threshold, the loan will be liquidated, and lenders will be repaid using the borrower’s collateral. In the event that borrower collateral is not able to fully cover lender capital, the insurance fund will be used to mitigate loan-loss. #### How are liquidations and rebalances/releverages motivated? When a user is liquidated GoldLink employs the Euler model of taking collateral to 1. pay the executor 2. cover loss 3. increase the insurance fund. When a borrower needs a rebalance or releverage a “soft-liquidation” is made. The soft-liquidator is paid a very small fee and in many cases not only is the borrower still holding their loan but their position also still exists. # Proposing Strategies ### Coming Soon # Terms of Service ### Coming Soon