GRVT has launched its Closed Beta Phase 1.0 this week. On the back of the launch, we hosted an AMA to discuss the company’s development and incentive plans with GRVT’s co-founders - CEO Hong Yea and CCO Matthew Quek. 

Have a look at a snippet of the conversation below. Recordings of the discussion will be released over the week on our Twitter and Discord.

The Origin of GRVT

Hong, CEO: I quit my job in May 2022, one week before LUNA crashed. Despite my boss’s suggestion to return to banking, I chose to pursue my goal of building something great. Alongside Matthew (CCO) and Aaron (CTO), we formed a team to create a hybrid exchange focused on self-custodial trading. The primary goal was to build a trading platform that could alleviate counterparty risk. That’s where we made the decision to build a hybrid exchange.

What I mean by hybrid is that it is an exchange leveraging blockchain technology to allow self-custodial trading and ensure that your funds are always in your own control. At the same time, we wanted to offer a very efficient order book on Ethereum that could compete with a centralized exchange.

Therefore, we were looking for a Layer 2 that we could partner up with. We saw that zkSync was one of the very few that could actually offer an institutional-grade level of Layer 2 service, such as high transactions per second (TPS), low gas fees, and on-chain privacy. Fortunately, we were able to convince zkSync creator, Matter Labs, to invest in GRVT as their first-ever investment. That’s how we started in 2022.

Since then, we raised a total of $9.3 million dollars from strategic investors, including notable trading partners like Flow Traders, Selini Capital, Pulsar Trading, Kronos, and Ampersan. We have over 15 trading partners who are investors as well as clients. On top of this, we have investors like Delphi Ventures and Matrix Partners who came early on as venture capital partners. We’ve put together a team of investors and clients who can bring value in different aspects. Key is bringing volume to GRVT - we have over $2 billion monthly committed volume.

Setting apart from other CEXes and DEXes

Hong, CEO: We call ourselves a self-custodial centralized exchange. This means that we are different from your typical DEXes and CEXes. We achieve this by having an off-chain orderbook and on-chain settlement. Key things that make us interesting is that we have an efficient orderbook that is built on an Aeron cluster, which allows us to achieve more than 600,000 TPS and under a single-digit millisecond latency. Our goal is to reach under 2 milliseconds for high frequency trading. 

On top of that, we have double security by leveraging both Web2 and Web3 security. An example - when you come to our platform, you will be required to add a password and register your wallet. You can connect an external wallet like Metamask. We will also offer the creation of a GRVT wallet, powered by Dfns, which acts as an invisible wallet. 

At the same time, if you want to withdraw your funds, we have a whitelisting process to prevent unauthorized access so you won’t be able to just withdraw to any account. GRVT also leverages Validium to enable on-chain privacy, which allows your on-chain transactions to be kept private and safe from market manipulations. 

Matthew, CCO: [In terms of how we are different from other perpetual DEXes], we can tackle this from a couple of angles. Firstly, we can address it from the security perspective. GRVT implements traditional security methods like username, password, and OTP along with wallet registration and whitelisting. This ensures that users can access the platform securely using familiar authentication factors. Additionally, trades and withdrawals require signing with your private key and wallet address, enhancing security compared to other decentralized exchanges.

Secondly, GRVT offers a comprehensive range of derivatives, including perpetuals, futures, and options. This provides users with greater flexibility and opportunities to protect against downside risks while still benefiting from upside potentials. Overall, our focus is to provide a user-friendly experience without compromising on security or functionality. 

Building on GRVT’s long-term vision

Hong, CEO: We’re building an exchange at the moment, but our vision is actually bigger than just an exchange. That’s why we decided to be an AppChain. Our goal is to build a whole ecosystem that is built around apps on crypto finance - from deposits and trading to investments and staking. 

We want to build various applications within or on top of our chain, all interoperable and consolidating the crypto finance value chain. Similar to Coinbase, we are looking to serve as a gateway for everyone who’s looking to enter into crypto. We want to be a point base where everything is self-custodial, trustless, safe, secure, and scalable. 

Outlining GRVT’s long-term timeline

Hong, CEO: We are starting small by first building a self-custodial crypto derivative exchange because we believe that is an area where there is the most counterparty risk of your fund. 

Our Closed Beta Testnet Phase 1.0 went live today, where we are working with selected institutions and partners to experience the current platform. 

Next, we’ll be launching Closed Beta Phase 2.0 at the end of April where we will be opening to the wider community and selectively inviting members to come in and test out the platform. By May, we’ll be looking to launch our Open Beta and by June latest, we’ll be launching on the mainnet. 

For our mainnet, we will focus on offering perpetual and options trading along with innovative tools like Trading Arcade. This isn’t something we’ve openly discussed yet but it is a feature that makes perpetual and options trading significantly easier for any individual. It’s a perfect tool for either hedging or taking opportunities in market volatility. 

By September, our target is to be launching a spot market. As we think about the whole infrastructure of the exchange, we’ll be looking subsequently to add on other features, such as social trading built on top of the whole platform. 

Partnering with major industry leaders

Hong, CEO: In recent months, our focus has been on building institutional partnerships to bootstrap liquidity from day one. We’ve secured commitments from over 13 market makers, including Flow Traders, Ampersan, Amber, and Pulsar, covering both options and perpetual trading. 

We’ve also onboarded over 40 institutional clients, such as Galaxy Digital and Manifold, to participate as Takers. Strategic partnerships with KOLs, like Ash Crypto and CryptoLark, will help promote the platform publicly.

On top of that, we are also partnering with wallet providers like Dfns to offer a seamless user experience. We’re also in discussions with cross-chain bridging partners to facilitate deposits to zkSync and GRVT’s smart contracts. 

We also have platform partners like Blockscholes to help ensure accurate oracle prices across multiple exchanges for perpetuals and options. As for on-ramp and off-ramp, we’re working with partners like Moonpay and last but not least, SpearBit DAO for our first audit in the coming weeks.

Solving scalability issues

Hong, CEO: Typically in Layer 2s, the problem is around scalability. GRVT is unique in the sense that we are a private AppChain on zkSync. This means that our infrastructure is entirely separate from the public zksync and we have our own private provers and custom sequencers. We can fully leverage the TPS capabilities of zkSync. This ensures scalability from day one, even during peak times. As we expand with multiple smart contracts on the AppChain, scalability remains a priority. We have the option to increase TPS by purchasing more infrastructure or launching separate AppChains for different use cases thanks to hyperchain’s high interoperability. Ultimately, partnering with zkSync and building as an AppChain allows us to achieve scalability and flexibility.

Breaking down incentives and rewards distribution

Hong, CEO: I believe the most important part of GRVT would be our community. We will always design our programs that benefit individual contributors over institutional ones. To achieve this, we allocate a minimum of 11% of GRVT Tokens in the first 18 months across various roles.

The Ecosystem Reward, currently ongoing, allocates 3% of tokens to encourage users to market the platform and invite others on to our waitlist.

The Trading Reward, launching with the mainnet, offers incentives based on trading activity with additional rewards for specific features like Trading Arcade. 4% of tokens are allocated for this program.

Another 4% is reserved for the Liquidity Provider (LP) Reward Program, to distribute to market makers and traders who add trading volume to our exchange. 

Additionally, we have a separate pool for the zkSync Mystery Box. Officially, we can’t say much other than the fact that it’s a zkSync Mystery Box. However, I would like to emphasize that we are in collaboration with Matter Labs as their first-ever investment and zkSync’s first official Appchain. 

Being compliant as a crypto exchange

Hong, CEO: As an exchange, our priority is to be compliant in order to ensure safety, security, and usability. We aim to cater to a broad clientele while adhering to regulatory standards. To achieve this, we’re pursuing a licensing in Bermuda for a full exchange derivative license - expected by June. Compliance entails KYC and AML checks for all clients, while ensuring segregated custody of funds. We’re also working with legal counsel to accommodate users from various regions. Ultimately, our goal is to maintain a compliant, safe, and secure platform for sustainable operations.

Recordings of the discussion will be released. Join our Twitter and Discord.