The Autonomous Hegician

4 min readNov 13, 2020

The time has finally come.

Hegic is a decentralised option platform based on the Ethereum network. The Hegic smart sontracts allow individual holders to buy call and put options on ETH and WBTC or to sell call and put options by providing liquidity to the dedicated pool. The premium on option contracts, which expire worthlessly or were not executed, get distributed between the liquidity providers.

In return, if an option is executed in the money, the option holder can redeem his right and buy/sell the asset from the corresponding pool.

However, smart contracts cannot initiate a transaction themselves, holders will need to manually sign the transaction and submit it to the chain to execute their option contract. This can end up resulting in ITM (in the money) options expiring because the owner was not present to execute them on time.

This is where the Autonomous Hegician (AH) comes into play. The AH is a software agent based on Fetch.ai’s agent framework. The AH can be run on a standard laptop, in the cloud or hosted on a Raspberry Pi. Fetch.ai’s agents, also referred to as Autonomous Economic Agents (AEA) are computational units, capable of acting independently of constant user input.

Think of them like personal helpers that never sleep.

These helpers have multiple skills encapsulating specific business logic. Skills can react to incoming messages via their handlers, but crucially also initiate activities themselves to achieve their set goals via their behaviours.

Agents are fully featured to interact with smart contracts, which has allowed the implementation of a personal options manager.

The AH can be run on minimal hardware specs, it provides a fully-featured locally run application consisting of a database, a react front end, and an AEA.

The AH monitors your options positions for you and allows for more functionality than traditional smart contracts.

Current Beta Features

I have a few surprises for the community included within this beta release. Building on the Hegic/Fetch.ai stack has allowed some firsts in the world of defi.

● Auto Exercise ITM options contracts

I know you’ve all been waiting on it. So I’ve delivered it. No more waiting around in fear watching the clock. The AH will protect your capital.

● Quickly create new options contracts.

The AH is entirely self-contained. It does not need a user to sign a transaction manually using MetaMask. It signs its own orders itself. And the private key never leaves the AH.

● Create options with fine grain control

No more are you limited to weekly options, if you need to hedge against another protocol/market. Now, if you need to hedge an option expiring in 4 days, no problem.

● Decentralised Automated Trading on Ethereum.

Run the tests on your own local chain before deploying to live.

Don’t trust. Verify.

● Monitor And Manage your own personal Keys

I invite all Hegic users to use the AH, I can’t see a reason why you would not use the AH as a backup in the event that you are not present to exercise your in profit option.

Roadmap

It is a fact that more than 70% of the trading in traditional finance is done by machines. The world of DeFi will be no different.

I want to build the foundation for the next generation of Quantitative traders.

The Autonomous Hegician is where it all starts.

There is a lot more coming in the following weeks, and as the AH evolves, you can check progress at the github listed below.

● Limit Orders & Take Profit — November

● Running Multiple AH’s — December

● Hegic Option Flow Analytics and Dashboard — 2 weeks

● Running AH’s for Users — 2/3 months

WARNING:

Un-audited code.

You use this at your own risk.