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.
12/20
Synths can be locked in option pools to earn yield from premiums and compound on pool rewards.
12/20
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 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 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
15/20
And it creates opportunities for managed options vaults on #assetmanagement platforms like @FactorDAO
Learn more about $FCTR here π½
15/20
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
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
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
Loading suggestions...