Preview of a New Project | Analyzing the Arbitrum Ecosystem’s Non-Liquidation Lending Protocol – Ghast Protocol

Analyzing Ghast Protocol's non-liquidation lending protocol in the Arbitrum ecosystem.

Arbitrum’s newly launched Ghast Protocol, as part of the GMD and GND protocol ecosystem, recently launched a public round and its token $GHA immediately soared from $12 to the $40+ range. Cryptocurrency influencer 0xJeff analyzed the protocol’s principles, token economics, competition landscape, technology, narrative advantages, and risks.

Ghast is a non-custodial currency market (Defi lending) protocol that integrates with GMX, GMD, GND, and other protocols on Arbitrum, aiming to provide users with higher capital efficiency and better returns. Ghast can achieve a risk-free circular strategy through: 1) The lending market is limited to specific collateral deposited by users, for example, gmdUSDC collateral only allows borrowing of USDC, and since gmdUSDC is pegged 1:1 to USDC, the liquidation risk is small as long as the peg remains healthy; 2) LTV limit is 80% (users can only access $80 USDC with $100 gmdUSDC collateral); 3) Interest rates are also capped at the underlying asset, which is in high demand for easy-to-use circular/recursion lending vaults.

Unlike Luna – UST, gmdAssets are supported by collateral targets (with no chance of death spiral). As a key partner in the GMD ecosystem, Ghast can leverage the relationships, consultation, liquidity incentives, and GND POL liquidity engine of GMD and GND. Token economics: custody token economics ($GHA | $esGHA ), where $esGHA provides collateral rewards, linearly distributed over 200 days into GHA, staking to earn platform fees and rewards, and 10% of platform fees are used for GHA buyback and burn.

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Competition landscape: Compared with the top two Arbitrum lending traders Tender.fi and Lodestar Finance, $TND has an FDV of $21 million, $LODE has an FDV of $140 million, and $GHA has an FDV of $6 million. Both products are tailored to Arb blue-chip protocols, with Tender focusing on gmdAssets and GMX GLP, and Lode focusing on plvGLP. In addition to competing with Tender and Lodestar, cross-chain lending institutions such as AAVE, dForce, Compound, and Silo also hold a large amount of TVL on Arb. However, Ghast will not directly compete with those cross-chain lending institutions because it has unique products: 1) Risk-free gmdAssets market; 2) Leveraged mining vault; 3) Long-tail/high-risk GMD and GND partnership assets (this is my guess, but seems likely).

Reference: https://twitter.com/LandfSmile/status/1660555951836135424

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