𧡠You all know about futures, but what about options?
A way of betting on market direction or hedging positions.
A big #DeFi narrative for 2023. I believe @dopex_io will be at the forefront.
The pitch: hedge $BTC, $ETH and other #crypto assets directly from your wallet. 1/20
A way of betting on market direction or hedging positions.
A big #DeFi narrative for 2023. I believe @dopex_io will be at the forefront.
The pitch: hedge $BTC, $ETH and other #crypto assets directly from your wallet. 1/20
β What the hell are options?
Financial contracts that give the holder the right to buy or sell an asset at a pre-determined price on/before a specified date.
Two types: call options, which allow the holder to buy, and put options, which allow the holder to sell. 2/20
Financial contracts that give the holder the right to buy or sell an asset at a pre-determined price on/before a specified date.
Two types: call options, which allow the holder to buy, and put options, which allow the holder to sell. 2/20
β How do you use them?
Can be used to hedge positions or speculate on market direction. But they also involve a level of risk.
It is important to understand the mechanics of options and the risks involved before using them in trading. 3/20
Can be used to hedge positions or speculate on market direction. But they also involve a level of risk.
It is important to understand the mechanics of options and the risks involved before using them in trading. 3/20
π§ There are different ways of utilizing options. #Dopex offers three!
I'll summarize them and then give a detailed breakdown on how they all work.
1οΈβ£ Option pools:
Allow #Dopex users to earn #RealYield by providing liquidity for buying and selling options. 4/20
I'll summarize them and then give a detailed breakdown on how they all work.
1οΈβ£ Option pools:
Allow #Dopex users to earn #RealYield by providing liquidity for buying and selling options. 4/20
2οΈβ£ Single Staking Option Vaults (SSOVs):
These allow users to earn yield on their staked assets.
They do this by depositing them into a contract and selling them as call options to buyers at a fixed strike price. 5/20
These allow users to earn yield on their staked assets.
They do this by depositing them into a contract and selling them as call options to buyers at a fixed strike price. 5/20
3οΈβ£ Synthetic derivatives (synths):
These are tokens that track the prices of real-world assets such as stocks, commodities, ETFs, indices, and cryptocurrencies.
These can be traded as on-chain proxies for non-crypto assets (a huge future market in my opinion). 6/20
These are tokens that track the prices of real-world assets such as stocks, commodities, ETFs, indices, and cryptocurrencies.
These can be traded as on-chain proxies for non-crypto assets (a huge future market in my opinion). 6/20
πββοΈ Option pools:
Deposit assets which are used as liquidity for users to purchase call and put options.
Each epoch, depositors collect their share of pool holdings, including premiums paid and $DPX rewards.
If there are losses, they receive $rDPX tokens as a rebate 7/20
Deposit assets which are used as liquidity for users to purchase call and put options.
Each epoch, depositors collect their share of pool holdings, including premiums paid and $DPX rewards.
If there are losses, they receive $rDPX tokens as a rebate 7/20
πββοΈ Volume pools offer discounts on option purchases made using volume pool funds to incentivize TVL.
Depositors get $DPX token rewards and can withdraw excess funds from the pool.
May pay a penalty for non-usage of funds. Penalties can be withdrawn by $DPX holders. 8/20
Depositors get $DPX token rewards and can withdraw excess funds from the pool.
May pay a penalty for non-usage of funds. Penalties can be withdrawn by $DPX holders. 8/20
π¦ Single Staking Options Vaults (SSOVs):
Users deposit assets into a contract that sells deposits as call options to buyers at fixed strikes for end-of-month expiries.
Strikes for SSOVs are set at beginning of new epoch and users can select fixed strikes to sell calls. 9/20
Users deposit assets into a contract that sells deposits as call options to buyers at fixed strikes for end-of-month expiries.
Strikes for SSOVs are set at beginning of new epoch and users can select fixed strikes to sell calls. 9/20
π¦ SSOVs offer low risk covered calls and yield is earned based on the proximity of strike to the at-the-money (ATM) price.
Buyers purchase calls from SSOVs using the base asset, and settlements happen through net settlements without requiring underlying asset. 10/20
Buyers purchase calls from SSOVs using the base asset, and settlements happen through net settlements without requiring underlying asset. 10/20
𧬠Synthetic derivatives (synths):
Dopex uses $rDPX as collateral to mint synths that are securely collateralized without an on-chain price feed.
Synths designed to incentivize sponsors to properly collateralize positions, including a liquidation and dispute processes. 11/20
Dopex uses $rDPX as collateral to mint synths that are securely collateralized without an on-chain price feed.
Synths designed to incentivize sponsors to properly collateralize positions, including a liquidation and dispute processes. 11/20
𧬠Synths give $rDPX value as they're tradable as proxies for non-crypto markets and require $rDPX to be used to maintain collateralization ratios.
Synths can be locked in option pools to earn yield from premiums and compound on pool rewards.
Synths can be locked in option pools to earn yield from premiums and compound on pool rewards.
https://twitter.com/JumperWave/status/160258300413159014612/20
π€ What about Straddles?
As a side note, #Dopex have also launched a very interesting product called Straddles.
In summary it's a smart way of potentially profiting from volatility.
Requires a thread in it's own right, or start here π½
blog.dopex.io/articles/dopex⦠13/20
As a side note, #Dopex have also launched a very interesting product called Straddles.
In summary it's a smart way of potentially profiting from volatility.
Requires a thread in it's own right, or start here π½
blog.dopex.io/articles/dopex⦠13/20
π§° #Dopex is set up to offer multiple use cases:
π§ Providing liquidity
π Maximizing gains for option buyers
π Minimizing losses for option sellers
π¨βπΎ Earning yield through staking
These range from simple to complex so make sure to do your research! 14/20
π§ Providing liquidity
π Maximizing gains for option buyers
π Minimizing losses for option sellers
π¨βπΎ Earning yield through staking
These range from simple to complex so make sure to do your research! 14/20
π§° #Dopex is primarily available on #Arbitrum which makes it scalable and affordable.
And it creates opportunities for managed options vaults on #assetmanagement platforms like @FactorDAO
Learn more about $FCTR here π½
And it creates opportunities for managed options vaults on #assetmanagement platforms like @FactorDAO
Learn more about $FCTR here π½
https://twitter.com/CrossChainAlex/status/159620516795884339415/20
πͺ The protocol has a dual token model with an emphasis on governance and #RealYield:
1οΈβ£ $DPX: a governance token with a limited supply
2οΈβ£ $rDPX: a rebate token used for protocol usage.
Uses: governance, fee accrual, and generating synthetic collateral for pools. 16/20
1οΈβ£ $DPX: a governance token with a limited supply
2οΈβ£ $rDPX: a rebate token used for protocol usage.
Uses: governance, fee accrual, and generating synthetic collateral for pools. 16/20
πͺ $DPX is used for voting on governance proposals and accrues fees from pools, vaults etc.
$rDPX is minted to cover losses incurred by pool participants, used as collateral for synths, a fee requirement for app layer additions, and to borrow for leveraged positions. 17/20
$rDPX is minted to cover losses incurred by pool participants, used as collateral for synths, a fee requirement for app layer additions, and to borrow for leveraged positions. 17/20
π¨βπ« Options are a way to bet on market direction.
However, they also offer multiple opportunities to hedge and/or create delta neutral positions.
Personally I see them as an inevitable addition to the #crypto trading market makeup in years to come. 18/20
However, they also offer multiple opportunities to hedge and/or create delta neutral positions.
Personally I see them as an inevitable addition to the #crypto trading market makeup in years to come. 18/20
π€ Tagging a few who might be/are interested in Dopex
@LouisCooper_
@RiddlerDeFi
@EricCryptoman
@rektdiomedes
@BarryFried1
@JumperWave
@milesdeutscher
@TheDeFinvestor
@thedefiedge
@CryptoKaduna
@monosarin
@FungiAlpha
@crypthoem 19/20
@LouisCooper_
@RiddlerDeFi
@EricCryptoman
@rektdiomedes
@BarryFried1
@JumperWave
@milesdeutscher
@TheDeFinvestor
@thedefiedge
@CryptoKaduna
@monosarin
@FungiAlpha
@crypthoem 19/20
π¨βπ« Options can be powerful but also complex.
Start your own research journey on #Dopex here:
π³ linktr.ee/Dopex_io
I hope this thread helped shed some light on the subject.
If you enjoyed it then give it a retweet and give @CrossChainAlex a follow. 20/20
Start your own research journey on #Dopex here:
π³ linktr.ee/Dopex_io
I hope this thread helped shed some light on the subject.
If you enjoyed it then give it a retweet and give @CrossChainAlex a follow. 20/20
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