1/ ๐ DeFi Pulse Drop #19: @sirenprotocol ๐
No one can escape time, not even options.
Theta or time decay refers to the reduction in value of an option as the time to the expiration date nears.
SIREN AMM v2 mitigates theta decay loss using a Black-Scholes model for pricing.
No one can escape time, not even options.
Theta or time decay refers to the reduction in value of an option as the time to the expiration date nears.
SIREN AMM v2 mitigates theta decay loss using a Black-Scholes model for pricing.
2/ Two factors determine the price of each trade: spot price and slippage.
The spot price is determined using a Black-Scholes model, taking into account parameters like underlying price, time to expiration, option strike and implied volatility, coupled with a Chainlink oracle.
The spot price is determined using a Black-Scholes model, taking into account parameters like underlying price, time to expiration, option strike and implied volatility, coupled with a Chainlink oracle.
3/ Similar to other AMMs, trades will be impacted by slippage based on the size of the trade and available assets in the pool.
In other words, the larger the trade relative to the size of the pool, the higher the slippage. This slippage benefits liquidity providers of the pool.
In other words, the larger the trade relative to the size of the pool, the higher the slippage. This slippage benefits liquidity providers of the pool.
4/ Utilizing this formula for its pricing allows Siren Markets to be time-decay-aware requiring no arbitrage in order to quote reasonable prices.
Learn more about the advantages of SIREN's AMM design defipulse.com/blog/siren/
Learn more about the advantages of SIREN's AMM design defipulse.com/blog/siren/
5/ This is paid promotion as part of our DeFi Pulse Drops series where DeFi Pulse works with projects to launch their new features and builds. If you want us to work with you, please get in touch!
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