Asteria AMA Recap

What products does Asteria have and in the future, will you add more products?

Asteria will provide various types of options for all kinds of users speculating and hedging purposes.

In Asteria test net period, we offer classic American options for WBTC and ETH.

In Asteria V1, there are two key products to be released:

1, Impermanent Loss Hedger

Impermanent Loss refers to that under the classic XYZ model for spot cryptocurrency swap system, no matter the exchange rate trending in either direction, the total value of two assets would suffer loss rather than simply holding them, which is the Achilles’ heel of DeFi.

Asteria aims to be one of the essential infrastructures of DeFi legos, to solve the IL headaches for liquidity providers who play a key role in the entire ecosystem.

Based on the solid mathematical theory foundation, Asteria invents the Impermanent Loss Hedger product, internally hedging the IL by a combination of a set of put & call European options. Even though it requires deep understanding and complicated executions of options handled by Asteria team, the user interfaces are quite simple and straightforward:

The user would only need to make three simple selections:

  • Hedging Period: Daily/Weekly
  • Hedging Mode: Bidirectional/Only Downside Protection/Only Upside Protection
  • Hedging Level: High/Medium/Low

The higher level of hedging would result in theoretically better hedging performance, with the higher cost, of course.

We also did a bunch of backtesting on BTC data on Uniswap and the cost of such hedger only floats less than 1% of the total value staked in the liquidity pool.

2, Asteria Step Option

Introducing: Asteria Step Option, which is divided into two types of option structures, StepUp (call) and StepDown (put), to meet users’ two-way demand for market bullish and bearish expectations. It sets up a three-level step structure to facilitate investors to manage market risks and accurately make directional investments. Asteria Step Option uses the 15-minute option period as the benchmark and realizes pricing and trading through an automated market maker mechanism. The product has the characteristics of American options, and customers can freely choose the timing to exercise 10 minutes before the expiration of the contract.

StepUp option: During the 15-minute option period, if the price of the underlying asset increases by more than K1, the investor will get an income of R1. If the price of the underlying asset increases by more than K2, the investor will get the income of R2. If the price of the underlying asset increases by more than K3, the investor gets an income of R3.

Similar to the StepDown option, only with downward direction payout.

Asteria Step Option expires in 15 minutes, but as the volatility of the underlying asset changes, or for different underlying assets, the Asteria may adjust the time length of the option contract (the structure of options remains unchanged), to reduce the risk of investors and market-makers.

Asteria Step Option automatic quotation system will price the option 5 times at 1-minute intervals in the first 5 minutes of 15 minutes, for investors to purchase. Investors would get the fairest price of the current time when entering the platform.

Buyers of Asteria Step Option can independently choose the settlement time according to the price fluctuation within the 10-minute window after the first purchasing 5-minutes window is closed. If the position is held until the end of 15 minutes, the settlement will be exercised based on the close price.

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Asteria

Asteria

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Asteria, committed to be DeFi infrastructure, defines decentralized protocol of option pricing, trading and hedging of AMM mechanism