GAINS Associates
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GAINS Associates

Hedget — Telegram QUIZ & AMA — September 03

On Thursday, September 03, we had the pleasure to welcome to our Telegram chat:

Sergey Lubkin, Co-founder and
Andrey Sarayev, CTO of Hedget.

We asked them questions about the development of Hedget.

Some sentences have been slightly edited for readability but the meaning has been conserved.

Summary

Hedget is onboarding to the Chromia mainnet to empower their DeFi platform with the performance required to facilitate large numbers of users.

The protocol also adds in support on Layer 2 to existing blockchains such as Ethereum to enable faster, cheaper, and more complex transactions.

The HGET token is a native utility and governance token of the Hedget platform.

Hedget has raised $790,000 in a private sale round and started a public sale auction as well as IEO on FTX.

Introduction

Q — Alex Raffin from GAINS: What did you do before crypto, how did you get into crypto and did you have any other venture in crypto previous to being involved with Hedget?

A — Serge Lubkin from Hedget: Before crypto, I was a marketing guy, with an Economics background. I was always interested in tech and innovations, so in 2014 my classmate invited me to invest in his bitcoin farm. It didn’t work out, but I got my first bitcoins instead.

Serge Lubkin

A — Andrey Sarayev from Hedget: Before crypto, I did my PhD in Computational Finance and worked for hedge funds and Fintech companies specialized in trading. In the Crypto space I worked on trading and blockchain development projects.

Andrey Sarayev

Product

Q — Alex Raffin from GAINS: How did you come to be behind one of the most hyped projects of the space?

A — Serge Lubkin from Hedget: I was Chromia's marketing lead during IEO and further exchanges listing. I built relations with communities and influencers. I’m MSc in Economics, but all my life, I’ve been doing marketing for various projects. Also, I’m an experienced derivatives trader, traded a lot on BitMEX/Binance/Deribit, mostly perpetual swaps and futures, and also options.

So we ideated with the Chromia team regarding different DeFi ideas and collectively came out to option trading protocol. Now separate projects with our developer and marketing teams.

A — Andrey Sarayev from Hedget: We feel that we are in the right place at the right time. It’s a good time to work on options in DeFi space.

Q — Alex Raffin from GAINS: Tell us your role at Hedget and what the project is about.

A — Serge Lubkin from Hedget: Right now, I have a CMO and business development role. My goal is to make Hedget the most popular and successful crypto options trading platform. It’s an ambitious goal but we know how to make it.

A — Andrey Sarayev from Hedget: My role is to organize the technical development of our product and oversee trading on our platform.

Q — Alex Raffin from GAINS: What stage is the project/product at?

A — Serge Lubkin from Hedget: We are finalizing our MVP. Works fine as a demo now but we want to add and test more before showing it to the public

Q — Alex Raffin from GAINS: What is the token use case? How did you make sure it captures the value of the ecosystem you’re building?

A — Serge Lubkin from Hedget: The HGET token is a native utility and governance token of the Hedget platform. It will be issued on the Ethereum network as an ERC-20 contract and will have representation on a Chromia sidechain.

Firstly, HGET will serve as a governance token of the HGET DAO. In the preliminary stages, the DAO will vote on default assets, options parameters, and UI improvements.

As the platform is further developed, HGET tokens will also be used to determine transaction fees, reserve requirements, and general functions and features.

Secondly, it will be used to prevent spamming of orders, leading to API overloads and order book manipulation. HGET tokens will need to be staked to interact with the platform. Staking requirements will increase as the monetary value and frequency of a user’s interactions increase.

Lastly, the HGET token will be used as a security measure and reputation engine when margined options are implemented. Options writers who wish to offer options without providing 1:1 collateral will need to stake HGET tokens, which will be used to purchase fully collateralized options as a hedge. This mechanism ensures end users cannot be adversely affected by the insolvency of an options writer.

Q — Twitter user @Trung34566: What are the difficulties and opportunities that Hedget is facing right now while the crypto/blockchain market is still young and needs time to grow?

A — Serge Lubkin from Hedget: We have a first-mover advantage in a market that we believe will boom. While we are keeping ourselves updated on competitors, we still believe that our solution is and the team behind it has great advantages. The biggest challenge is to bring on as much liquidity as possible — liquidity wins the game.

A — Andrey Sarayev from Hedget: As pioneers, we need to educate users, solve the technical problems that other people didn’t experience before, and grow our user base from zero.

Q — Telegram user imearth: There are many Layer 2 solutions. What makes Hedget unique?

A — Andrey Sarayev from Hedget: Chromia is a relational database, which makes it much easier to work with it and create new projects.

Q — Telegram user Sonia: How do Option Products protect against sharp drops and changes in the price of cryptoassets?

A — Andrey Sarayev from Hedget: When you own an option, there is no risk of liquidation.

Q — Telegram user Ninin IV Neon: What are the requirements to stake HGET? How does Hedget leverage calculation?

A — Andrey Sarayev from Hedget: Initially the options on Hedget will be fully collateralized, fully protecting the clients. Later, conservative leverage will be introduced

Q — Telegram user 🚬🚬BIG MOM🚬🚬: Are ETH’s network congestion and high fees affecting the Hedget? What action did the team take to smooth the flow of network operation and satisfy the users?

A — Serge Lubkin from Hedget: Yes, it will affect, but not in the critical way as you interact with Ethereum only once when you write an option (and optionally when you wish to physically settle it on Ethereum). Besides that, all trading happens on Chromia without any transaction fees to Chromia blockchain also with no transaction limits, and on super high speed.

Q — Telegram user JaKi: What solutions do the option products provide for users? How will Hedget’s option products deal with price fluctuations?

A — Serge Lubkin from Hedget: Spot trading, futures trading, and options trading go in parallel. You need options to be certain about the price of an asset in the future, for example, if you are a miner, pool liquidity provider, market maker, marginal trader, lender, or borrower you need to have an option to “pause” the price or to ensure it will remain fixed or within a range you need

In this case, you use options or option-based products to hedge your clients’ position.

Q — Telegram user Satish 💲: What’s the main problem with centralized systems? How does Hedget solve those problems?

A — Andrey Sarayev from Hedget: Centralized systems introduce risks and decrease flexibility, DeFi approach helps with that.

Q — Telegram user Sonia: How do Option Products protect against sharp drops and changes in the price of crypto assets? What innovations does Hedget bring to the DeFi space?

A — Serge Lubkin from Hedget: By buying options you are buying an opportunity to buy or sell an asset at a certain price. This way you know you will be able to do it in the future.

The whole DeFi industry is built on top of borrowing. When we have borrowing we have collaterals. When we have collaterals we have LTV. And when you have high LTV you have liquidations. Instead of liquidating immediately, a user or a platform can buy an option to win time for itself or its client.

Security

Q — Telegram user Crypto Star: How does Hedget solve the scaling problem? And how will the threat of centralization be overcome?

A — Andrey Sarayev from Hedget: The scaling problem is solved by using Chromia blockchain, which is very fast as Layer 2. The threat of centralization is solved by bringing a very diverse set of clients to the platform.

Q — Twitter user @JakariahAngga: How is Hedget going to prevent theft and abuse by hackers?

A — Serge Lubkin from Hedget: System overload — by HGET staking, unnecessary overload, or spam orders and the stake will be liquidated.

Lack of liquidity — by liquidity mining

Hacker attacks are more difficult if there is no ultimate point of failure, but of course additional audits and security checks. Ultimately you can’t hack exchange if users control their funds independently

A — Andrey Sarayev from Hedget: In addition to the above we are applying best industry practices in terms of security and invest a lot of resources in security tests and audits.

Q — Telegram user Cyckorry: How will Hedget provide security of users' funds?

A — Andrey Sarayev from Hedget: Clients control their own keys and funds on the blockchain are locked in smart contracts. This greatly reduces typical security risks for centralized systems.

Partners

Q — Telegram user Farah: Why did Hedget partner with Chromia?

A — Serge Lubkin from Hedget: The Hedget protocol is built on top of Chromia and is incubated via Chromia team. We need CHR reserves for paying for hosting on top of Chromia blockchain as well as for the future integration with the Chromia ecosystem. We also are strong believers in Chromia and we want to support it in different ways.

Q — Telegram user Jeetu sir: What is the value of this partnership with Alameda Research?

A — Serge Lubkin from Hedget: Alameda Research is helping us in various ways. We are having IEO on FTX exchange as a result of such cooperation. They also introduced us to a wide range of communities around the Globe. We are excited and looking forward to our future cooperation with this amazing crypto fund

Q — Twitter user @DurdenMagnat: Why did Hedget choose to use Chromia as layer 2? What is the relationship between Hedget and Chromia?

A — Serge Lubkin from Hedget: Chromia is bootstrapping this project. We receive development resources, know-how, and other support from the Chromia team.

Chromia is just so much more efficient to use when developing DeFi products. It is a relational database wrapped in a blockchain, which means we get all the benefits of transparency and immutability. At the same time, we still can develop complex financial products as they are developed in traditional markets on relational databases.

We will have short development cycles with high freedom in functionality.

Q — Alex Raffin from GAINS: How many people are in the team? For how long have you been working on Hedget?

A — Serge Lubkin from Hedget: 12 as of now, but we are growing fast. We’re looking for people with a strong blockchain development or financial background.

Finance

Q — Alex Raffin from GAINS: Did you raise funds so far? If so, how did you handle them? Are you planning to do any future raises?

A — Serge Lubkin from Hedget: We raised $790,000 in a private sale round and we started our public sale auction as well as IEO on FTX.

Technology

Q — Telegram user Cristal: Has the team thought of switching to another blockchain with Ethereum transaction fees on the rise?

A — Andrey Sarayev from Hedget: Hedget uses Chromia blockchain as a layer 2 solution which makes fees very low.

Business Development

Q — Telegram user Smirnov: What’s your plan regarding the release of the tokens from the liquidity mining? Will they be released gradually or in bigger bunches?

A — Serge Lubkin from Hedget: It will be a slow gradual release within phases(waves). It cannot be any unexpected big release because of some error in code or exploit.

Q — Telegram user John 🇫🇮: What sort of plans do you have regarding the staking possibility of the $HGET tokens? Does it have some additional incentives?

A — Serge Lubkin from Hedget: The HGET token is the native utility and governance token of the Hedget platform. It will be issued on the Ethereum network as an ERC-20 contract and will have representation on a Chromia sidechain.

Effective immediately upon launch, HGET will serve as the governance token of the HGET platform. In the preliminary stages, the token holders can vote on adding new assets, default options parameters, and UI improvements.

Before the platform is launched with real assets there will be a Testnet platform (hosted on both Chromia and Ethereum testnets) to participate on which users need to stake HGET to access. Users will trade funds that have little to no real value, but the best performing traders will be rewarded automatically by Hedget protocol with HGET tokens upon mainnet release.

When the platform migrates to Mainnet, HGET will be used to prevent spamming of orders which can lead to API overloads and order book manipulation. HGET tokens will need to be staked to interact with the platform. Staking requirements will increase as the monetary value and frequency of a user’s interactions increase.

As the platform is further developed, a DAO will be established and HGET tokens will be used to determine transaction fees, reserve requirements, and general functions and features of the platform.

Lastly, the HGET token will be used as a security measure and reputation engine in the future when margined options are implemented. Options writers who wish to offer options without providing 1:1 collateral will need to stake HGET tokens which will be used to purchase fully collateralized options as a hedge in case of Capital insufficiency risk. This mechanism ensures end users cannot be adversely affected by the insolvency of an options writer.

Thanks for the answers Serge and Andrey. Hedget has certainly managed to partner with top tier companies in crypto and has attracted a ton of interest. I’m looking forward to seeing the MVP. Is there anything else you’d like to share? Where can we follow you? — Alex Raffin from GAINS

Thank you for inviting us today and for great questions — Andrey Sarayev from Hedget

Thanks a lot for having us today and for your amazing questions!

Website, Twitter, Telegram, Medium Blog, Hedget Whitepaper — Serge Lubkin from Hedget

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