Saturday OpenPredict AMA streak highlight
OpenPredict team and COO of DAO Maker had a busy Saturday as they performed several live AMAs and engaged with the community after overwhelming response during the whitelist run process.
Here is a highlight of several interesting questions from all the AMAs.
Crypto Daku: Can you tell us all more about OpenPredict, the idea, how it started?
A: OpenPredict is the first DeFi protocol to turn live predictions into liquid assets. This is the first solution to provide deep hedging and insurance on any asset, smart contract, or event. The reasoning for such a product is quite vivid, especially right now. There is a very high idiosyncratic risk in the market due to most portfolios being concentrated on specific assets (BTC maxis, DeFi maxis, ETH maxis, etc.). Options can provide cover for such a risk, and no such options exist in a decentralized marketplace. Beyond that, options are also used as default swaps in traditional markets, when a business has bankruptcy. Crypto has a new format of bankruptcies: protocol hacks. Huge amounts locked in protocols need a basket coverage through a default swap, and options ccan provide that.
Crypto Daku: What are your primary focus in the next 100 days?
A: The development is heavily product-focused. The 100-day mark would cover Q4, which is when the first product launches: TrustPredict.
It’s designed for pre-release of the main product (open-market options). TrustPredict allows 1-on-1 predictions on anything, without the need for an escrow or coding skills. Its main purpose is to serve as the retractor of the early user base in preparation for the launch of open options.
Crytpo Daku: I saw that OpenPredict has a Tri-Smart contact system, that’s amazing. Please explain more about OPENPREDICT TRI-SMART CONTACT SYSTEM in simple words?
A: For each event, there are 3 contracts launched. One escrows the capital people are putting towards the option. One measures those who win the underlying funds if the options reaches its target (suppose a certain price target for a stock/crypto for the year), and one measures those who win the underlying funds if the option does not reach the target of the issued event.
Crypto Differ: Yesterday, you can see that the number of people who signed up for WhiteList to buy OPT is extremely large. There are even people who are willing to spend 5 times their initial purchase to get OPT if the registration was successful yesterday. So what is the reason why OpenPredict is the hottest keyword today? Is the way of possessing OPT in a new way fair to everyone?
A: 3 words to describe us: DEFI + UNISWAP + LOW VALUATION. The team is backed by DAO Maker which is one of the most respected incubator in the space. They were heavily involved with the likes of Orion Protocol, Elrond, LTO Network, and 2key. We expect products to be delivered, transparent means of operation, etc.
A: One of the core advantages Open Predict has compared to other DeFi protocols is that we actually introduced a new idea to the market. The technical implementation of our roadmap is luckily not as extensive as many other projects.
We expect to have finalized our detailed technical paper in about 2 weeks. We hope to finalize Trust predict the first main milestone on our roadmap in 3 months.
Crypto Differ: Could you give us an overview of OPT tokenomics? Is the token designed to rise and fall with the success of the platform, and does it include any scarcity paths such as stake, store, or burn?
A: For sure, there are only 9.9 million tokens available and our sale was only $250,000 worth of tokens, which represents 25.25% of the total supply. The token is designed to be a deflationary token thanks to regular buybacks and burns. OPT holders can greatly benefit from the token thanks to a few incentives. For instance, minting fees and escrow fees will go directly to OPT holders. Furthermore, using OPT can have numerous other advantages like discounts on many of our products.
HC Capital: What are the advantages of Openpredict over current Defi projects?
A: Most projects in DeFi have little differentiation as a vast portion of them are focused on just lending or aggregating lending. Over and over, the same thing.
But as a protocol focused on providing insurance to liquidity pools in lending, it’s great that a lot of projects want to make the same thing: their user bases become reliant on the only default swap available in the market, by OpenPredict.
HC Capital: What core products of OpenPredict will be released in the future? Can you talk more about them?
A: The core product is the OpenPredict Protocol itself. The project’s initial products are focused on options for default swaps (insurance, covered in my messages above deeply).
Followed by hedging against the risk of being all-in an asset, which will simultaneously provide leverage due to options being heavily leveraged by nature — without causing slippage, which is a key problem is decentralized markets. The development is heavily product-focused, but the first product is simpler: TrustPredict.
It’s designed for the pre-release of the main product (open-market options). TrustPredict allows 1-on-1 predictions on anything, without the need for an escrow or coding skills.
Its main purpose is to serve as the onboarding of an early user base in preparation for the launch of open options.
HC Capital: How does OpenPredict consolidate three prominent product markets in the Crypto market: predictions, DeFi, and trading?
Despite the dangers of going “all in,” many traders in the cryptocurrency space, driven by their belief in a dire need for change in the global monetary system, tend to ever-expose themself to a single asset. This generates severe idiosyncratic risk which can lead to sudden sharp falls in portfolio value.
Meanwhile, there are dedicated long-only funds and trusts in the crypto space who, per thesis and mission, are dedicated to a simple buy and hold strategy. Such funds and trusts are also severely at the risk of idiosyncratic risk.
OpenPredict provides retail and institutional traders and holders the opportunity to hedge their risk in catastrophic events by issuing options that can reward them in events of extreme volatility, as seen on the crash of March 12, 2020.
OpenPredict Protocol can enable the creation of products similar to default swaps. Such financial instruments have traditionally served investors who seek at least some monetary recuperation in case a company goes bankrupt.
While protocols cannot go bankrupt, they can be exploited of the funds they hold on behalf of liquidity providers. This is similar to bankruptcy, as the protocol can end up with fewer funds than owed to liquidity providers.
OpenPredict creates default swaps for established market protocols, like Compound, that hold significant funds on behalf of LPs. These default swaps provide LPs partial or complete coverage for funds lost in case of a protocol exploit.
While volume across decentralized exchanges has surged in 2020, the vast portion of market volume remains at exchanges. As does order book depth.
Order book depth is critical for highly leveraged trading, and as DEX lacks depth, highly leveraged trading has not surfaced in DeFi yet. Options trading, though, does not require order book depth in DEX as oracles capture price from all markets, even centralized ones.
OpenPredict’s provides trading that follows robust, accurate pricing and heavily leveraged trading ability through options markets. A powerful advantage of an open market for options is that it can even enable leveraged trading of assets that do not have a market yet and can enable a form of synthetic futures trading through options that expire upon asset listing.
Crypto Revolution: In the last few months, a DeFi protocol — dForce — was attacked resulted in a $ 25M total loss, so how could OpenPredict make sure that your database system safe from bad activities such as a hack or leaking information?
- DF’s database was not actually attacked
- DF’s smart contracts were not attacked either
- They supported ERC-777 tokens which allowed withdrawal rights without ownership, obviously a problem — that’s something the rest of the industry was aware of but the DF team had overlooked it.
Failures like these have driven high demand for insurance on liquidity provision. Events for protocol failure offer those insurance opportunities to the billions of dollars that now float through liquidity providers.
Crypto Revolution: What strategies have OpenPredict put in place to advance the adoption of the product and create a growing utility for it token?
A: Luckily for us open Predict is a very new concept and traditionally crypto likes and supports the first movers. OPT also benefits from both the betting users from Tron and EOS dapps as well as the huge user based from DEFI.
As OPT differentiates itself quite a bit from most other defi forks we are confident that we will see a lot of interest from non-traditional betting users as well.
Crypto Revolution: How secured are users' data and funds on your platform?
A: If the question is DAO Maker platform: We use AWS and the whole platform is non-custodial so we are pretty safe when it comes to data protection and funds.
Regarding OPT, most opt will be handled on a handful of audited smart contracts. That's the beauty of crypto. It's relatively secure once the smart contracts have been review often enough.
Crypto Revolution: On moving forward through your roadmap, what are your most important next priorities? Does OpenPredict team have enough fundamental ( Funds, Community, etc ) to achieve those milestones?
A: First clear step will be publishing the technical whitepaper of OPT. The Tech paper explains in details the implementation steps and timeline for the technical development of the protocol.
OPT is pretty much sorted with funds for implementing the first version of the protocol. The community is growing extremely quickly and we will provide OPT with our social mining software in about a week.
Crypto Pig: Can we expect strong holder offerings for future Dao Maker sales, for those who will be holding OPT? Will there be any staking or holding advantages, apart from the prediction aspect?
A: Haha this was going to be announced later, but yes
Holding OPT will be key to allocation in the next DYCO
Crypto Pig: So Openpredict is focused on asset price predictions for crypto and stocks will the protocol extend to other predictions, I’m thinking along the lines of predictit.com
A: More. The underlying protocol enables the creation of predictive options. The first products are released by the team itself.
The key focus being default swaps against protocol failure, hedging against idiosyncratic risk, and… by nature of options, highly leveraged trading in decentralized market without slippage
I’ll make it quite simple with examples.
In financial markets, hedging is an important risk-management tool. However, in the DeFi space, there’s little opportunity of doing so. The most common ways hedging is done is by having an option act as insurance if the price moves steeply against something you own (any asset).
Suppose you are all-in on ETH.
We’ve seen on March 12 that the market can drop rapidly without warning. Here’s the case at hand: how could anyone have protection in such an event, particularly in DeFi.
With a predictive option, they can. You can use a portion of the ETH you went all-in on to buy cover in case of a steep drop. The option will execute if, say, ETH drops a sudden 50% in a short time window (a week or less, this is just an example timeline).
The option works on the basis of creating a market for people willing to pay cost of highly unlikely events, and allowing others who seek very high leverage to be able to counter-trade these.
This is a very simplified example for hedging and position covers.
Crypto Pig: What’s the role of the DAO MAKER team in the OPT project, does this give you an added advantage over other DeFi projects?
A: We have very deep involvement in the space, and that gives OpenPredict access to our network, resources, and technology.
A snapshot of our presence and performance
TheGemHunters: Is there anyone within the cryptocurrency space who is aiming to achieve something similar to OpenPredict?
A: We don’t believe anyone has achieved what are trying to achieve. Opyn and Nexus do offer options against steep drops in the value of assets and insurance, which, to some degree, is similar to what the OpenPredict protocol offers, however, with OPT we allow users to have full control over the customization and others to participate freely. The protocol is open which means the possibilities are practically limitless.
TheGemHunters: Staking, yield farming, and overall high-interest rates are extremely important to most investors within the cryptocurrency space at this moment. Will OpenPredict offer any of it?
A: We do offer a wide array of benefits for OPT holders and stakers in the form of fees and discounts. Many of our products will offer notable discounts to people who use the OPT token, additionally, the escrow fee, as well as minting fees, will go directly to OPT stakers.
TheGemHunters: What is the usecase of the $OPT token?
Minting Fee: For each OpenPredict event, all participants pay a 1% minting fee, which is used to buyback OPT from the market, and then burn them. This fee is discounted if the minting address holds OPT.
Escrow Maintenance Fee: At the point of pool distribution to the token holders that won the event, 1% is deducted prior to distribution. This Escrow Maintenance Fee is distributed to OPT stakers. This fee is discounted if the minting address holds OPT.
oSwap Discounts: oSwap trading fees are 0.15%, but this only applies if the traders hold OPT tokens. If fees are paid without using OPT tokens, the fee is 0.2%. This 25% discount incentivizes active predictors to constantly hold OPT.
TrustPredict Maintenance Fee: TrustPredict will charge a trustless escrow fee of 0.5% for predictions that are shorter than 3 months, and 1% for predictions that are longer than 3 months. If the prediction fee is paid in OPT tokens, the fee receives a 50% discount.
TehMoonwalker: Is someone else trying to achieve the same as OpenPredict and if there are, how do you compare to your competitors?
A: There are other firms offering derivatives products in the space. Here’s a snapshot. But given how new DeFi space is, there is a lot of room for new kinds of derivative products that exist in traditional markets but not here.
This protocol complements every other DeFi protocol. Their growth increases market size for this one.
DeFi protocols require either staking of volatile assets or vast liquidity provision. Both formats build demand for protective measures.
- Insurance against protocol exploits
- Options to hedge volatility
TehMoonwalker: Was OPT involved in the SHO idea too or was that just an initiative of Daomaker?
A: That’s part of our vision to build an ecosystem where projects can be seeded with a strong community of holders and liquidity providers.
You best believe OPT will be needed for the next DYCO.
TehMoonwalker: is there going to be any pre-staking before the main launch like $orn or other benefits of holding until the q4 launch?
A: Pre-staking will be launched through a Social Mining system
The community will access it through staking, and then build a curve of staking rewards. All stakers will be rewarded, but the most active hodlers will get a curve reward above average, sourced from the completely passive ones.
The management of the staking reward distribution curve will be under users, through a voting system. This is already built and will be accessible shortly after listing.
This is just a short summary of 7 AMAs that OpenPredict held on Saturday. If you want to read the full AMAs join the groups.
We would like to thank you all groups highlighted above for giving us a chance to perform an AMA with their communities. Thank you to everyone that participated in the AMAs and learned more about OpemPredict