Mar 13, 2021
Summary of Recent Protocol Level Changes
A lot has changed in BIOPset since the launch of the first version of the protocol. In fact, change seems to be the only constant at BIOPset. If you visit the website, the first thing you’ll notice is that it’s now in “coming soon mode”.
Don’t let that deter you from imagining what you’d stand to gain in the present bull market. BIOPset V4 is presently running on Kovan and in need of more participation (testers). Anyway…
This article is a summary of the most recent developments at the protocol level. Before you dive in here is a recap of some important terms:
- Writers are the liquidity providers selling on-demand binary options.
- Traders are the options buyers speculating on price directions.
Over the last several weeks, a few of the most active members of the BIOPset community have been in heated discussions with Shalaquiana about what’s best for the platform’s success and holders of BIOP tokens.
Here is a summary of the way discussions concluded:
- Governance is live.
- BIOPset will defend writers.
- BIOP tokens will not receive any fees.
- BIOP V4 tokens will be sold to the public via audited IBCO contracts.
- The BIOPset UI will be improved for V4.
These changes are all material and will impact how the community views/participates in the platform. There were no changes to the utilization rewards scheme.
Governance
Originally, the goal was to implement governance after the platform went live. This is no longer the case. The need for governance is immediate. Protocol design is now a community affair.
Anybody holding BIOP V2/V3 tokens has the right to vote. Please get active and vote. The future of BIOPset depends on your active participation.
House Rules
There was fierce debate about not favoring writers over traders. The argument for making BIOPset a neutral binary options settlement platform was defeated.
The BIOPset will not favor writers over traders at first. However, in the case of excessive trading, the platform will programmatically defend the liquidity pool (aka “the house”).
The RateCalc code is the mechanism for controlling this is behavior. Initially, the code is impartial and functions as a traditional zero-sum settlement. Meaning the option premium is locked up with funds from the pool in a 1:1 ratio.
That ratio will change with each new option purchased. This will discourage behavior that causes the pool liquidity to dry up when certain bad actors manipulate the system.
The maximum return of each newly opened position decreases as a result. The behavior implemented in the code is best illustrated with Dereek69’s graph below:
Pure Governance Token
Initially, BIOP V4 tokens were to receive 0.2% of BIOPset’s trading volume (a platform fee). Unfortunately, some members of the BIOP community that are very active in development discussions live in the United States of America where the Securities Exchange Commission would consider the selling of a governance token with a revenue stream as the selling of a security. [1]
This source of revenue for the BIOP token was removed to make sure nobody goes to jail in the US.
The percentage of trading fees wasn’t a big concern when tokens were issued through the utilization rewards mechanisms. However, it is a huge deal given the plans to sell the BIOP V4 governance token in an IBCO.
Audited Contracts
Another spirited debate about the value of conducting the IBCO using audited smart contracts transpired. Even though audits slow everything down and do not guarantee anything other than an assurance that the code has been reviewed by professional coders (that rigorously check for bugs) the BIOP V4 IBCO code will be audited nonetheless.
Audited code does make future governance token holders rest just a little bit easier at night.
New User Interface
A new interface and logo are being developed. More news on that decision and the progress will come later. The user interface is still considered a very low priority issue.
Don’t like any of these conclusions? Please do not remain silent. Join the discussion on Discord.
Don’t understand what BIOPset V4 is? Then read here:
To learn even more about BIOPset, please subscribe/follow/check out:
Website: https://biopset.com/
Twitter: https://twitter.com/biopset
Discord: https://discord.com/invite/4SRYBNdE3r
Documentation: https://docs.biopset.com/
Please remember trading binary options is risky. That’s why financial derivatives are heavily regulated in certain jurisdictions.
This article is educational in nature. Nothing in this article is financial advice. Always do your own research.
[1] We don’t want to attach any platform profits to the token and we want to make it clear that BIOP V4 governance token holders should not expect any sort of capital appreciation for possessing the right to vote. Why? According to the Cutting Edge Capital legal gurus:
The U.S. Supreme Court has defined “profits” as “either capital appreciation resulting from the development of the initial investment . . . or a participation in earnings resulting from the use of investors’ funds.” The promised return may be fixed or variable and may be marketed as low-risk or “guaranteed.”
