On 25th June 8am (UTC), Charm will discontinue the current version of Charm Options and Cube Tokens to focus on Alpha Vaults, and researching the next version of Charm Options.
Over the past 5 months, Charm options became the most capital efficient protocol for decentralized options, and Cube Tokens a strong alternative for leveraged tokens. They are some of the most innovative platforms of its kind, and has generated trading volumes of $4.26 million and 773 ETH, and used by over 987 unique wallets.
Unfortunately, Charm’s success with traders came at the expense of liquidity providers (LPs). For Charm options, liquidity providers who did not hedge suffered a loss; and for Cube Tokens, the liquidity providers (who are also the traders) cannot quantify their risks and as a result, have experienced losses that cannot be hedged.
In response to the above, Charm started researching solutions for LPs. This began with an LP vault for Charm Options, and after many iterations, arrived at the concept of managing liquidity for Uniswap V3 LPs. Alpha Vaults was the result of these research efforts.
Alpha Vaults was launched on 7th May, becoming the first Uniswap V3 LP vault to do so. It is also the first to introduce range order strategy and passive rebalancing. Subsequent improvements in Alpha Vaults made it the simplest, most stable, and the highest returning LP vault of its kind; and its success created a new industry for market makers on Uniswap V3.
Alpha Vault’s success also meant Charm found an LP solution that has eluded both Charm Options and Cube Tokens. This is incredibly important because LPs are critical to the success of any DeFi protocol. To further consolidate Charm’s success for LPs, the following changes will be made to its existing products:
- Focus Charm’s development efforts on Alpha Vaults.
- Focus Charm’s research efforts on V2 of Charm Options.
- Discontinue V1 of Charm Options, following the expiry of the current market on 25th June at 8am (UTC)*.
No new options markets will be launched, but payoffs and liquidity can still be withdrawn at any time.
- Discontinue Cube Tokens on 25th June at 8am (UTC)**.
Deposits into cube tokens will no longer be possible after this date and time. Users can sell their cube tokens at any time for the market price as of 8am UTC on the 25th June.
Charm believes the changes above will bring long term sustainability to the Charm ecosystem, without sacrificing its immediate development and research priorities.
In the long-run, Charm is not saying goodbye to the discontinued products. On the contrary, it will continue researching future versions of these products, so they can rejoin the Charm ecosystem bigger and stronger!
Closing thoughts…
Charm is an ecosystem of innovative products, and the Charm team remains steadfast on working with the Charm community to build this unique and important ecosystem within DeFi. By focusing on Alpha Vaults, the ecosystem will have a stable pool of liquidity for further innovations, and one of these innovations is V2 of Charm options. It will be a substantial upgrade to V1, and the results of the research on V2 will be shared with the community in due course.
In the meantime, Charm will be working on exciting new collaborations and releasing new vaults and strategies for Alpha Vaults, in order to generate higher returns for LPs, and to help even more users learn about DeFi.
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