AMA with Crypomoonshots— April 29th, 2021
Host Questions
Q: Can you tell us about the team behind Options.Market and their experience?
A: Yep with pleasure. Since Fraser is not able to join us today, I’ll send a short write-up on him…
“Fraser: Paul and I have been working on the perfect crowdsale solution since 2018. We focused a lot on curation during the dark years (2018–2019). Some of you might know dontbuymeme.com. We launched Degen.VC right after seeing their launch and did not look back.
My background is Engineer, MBA, Olympian. Have worked in innovative finance (traditional) before going down the blockchain rabbit hole in 2016”
As for me, I have a slightly less glamourous background!
I am an ex-bank Treasurer with 20 years of Banking experience most of which spent in the derivatives an options markets.
This includes all asset types so crypto is another opportunity to bring my derivative skills to a new type of asset.
Co-founded $DGVC with Fraser in August of last year. Since then we have launched eight projects and a number of others in the pipeline.
$OSM is most exciting for me as I get to leverage my banking experience and 18 years of derivatives expertise — and in crypto! Life goal achieved!
I wondered how long it might take for the true innovation that has been witnessed in TradFi to permeate into DeFi?. After all, the principles of pricing and risk managing derivatives have long been established by such mathematical geniuses as Fisher Black & Myron Scholes (the Black-Scholes options pricing tools) and game theorists like John Nash (he of A Beautiful Mind fame).
Q: What exactly is Options.Market and how did you come up with the idea about it? Can you also give us a brief explanation of what its trying to achieve? What made you go after options?
A: Options.Market began life as a fork of a VC-backed anon-project called SirenMarkets.com, which is an open source mainnet, decentralized options trading solution for ERC20 tokens. Our issue with this is both the influence of VC’s AND the devs being anon for “legal reasons”…this seems a little disingenuous and not what this ecosystem needs. The more TradFi thought leadership that emerges, the better for us all!
However, I have given a tremendous amount of thought to all of the derivatives projects in the market and come to the conclusion that they are almost trying to be too clever. I’m a first-principles person.
Something like Options.Market that aims to and could become a protocol layer for onchain options should not be VC controlled with massive bags controlled by founders. It should be highly distributed from the outset This is what we did in fact and it sets us apart.
To the end of innovation in this market, we will be offering up to $25,000 in awards and grants during our current Gitcoin Hackathon that Degen.VC is sponsoring. It started on April 26 and runs until May 17, to relook at the entire market and start from first principles.
We thought, what if developers came together to solve many of the issues that are limiting the market’s expansion into the next-generation derivatives markets such as Structured Investment Products, multi-options strategies like collars, call/put spreads, butterfly spreads, and the 4th generation derivatives subset, known as binary options, with such features as one-touch, no-touch and other event-driven outcomes which TradFi options traders and clients so enjoy for risk management?
This is the genesis. Getting TradFi into the space with their experience and investment $$ — decentralised of course!
Q: How does it work, can you explain this in a brief and simple manner so that a person who has no idea about options can understand the concept?
A: I realise that the learning curve will be steep — but in fairness, DeFi yield farms have been adopted relatively rapidly and these have some characteristics of innovation not seen in TradFi..which is super awesome!
Most of the market operates on the concept of a fully-collateralized options market, where users provide liquidity and are rewarded for providing liquidity through aggressive offerings.
We want our v2 to contemplate issues such as settlement currency standardization — perhaps it’s ETH, perhaps a stablecoin like USDC regardless of the currency pair — fulfilment of buy/sell orders and cash-settlement of the underlying rather than trading through collateral tokens are all (relatively) new concepts to DeFi, and there is zero reason they can and should not be adopted.
After all, asset traders of all types like to shroud their “genius” in cool language, interesting acronyms and funky names. Much like any industry in the world with purported high barriers to entry, this is a smokescreen and the concepts are relatively simple.
Options are RIGHTS and not OBLIGATIONS to transact. When you are the buyer of an option, you pay a premium for the RIGHT to purchase or sell the underlying asset.
This means, if the position is in a loss position, you walk away and your only right is the premium you paid for that right.
That’s a foundational starting point.
Q: Thanks for the good explanation. You mentioned V2, when is this going live? Do you have a roadmap? What can we expect in terms of developments for the very near future?
A: Great question, and I want to refer to one of our Gitcoin Bounties regarding the answer…
Through the process of awarding prizes we want to see a diverse team take shape that will implement the existing protocol on BSC in time for demo day. We will seed this team with $20,000 in OSM tokens (based on a fixed price of $0.10 per OSM). This will be paid when the market on BSC goes live.
The BSC market is becoming so interesting for us. It’s a gateway to rapid innovation.
As ETH scales and becomes more affordable, the innovation that can be led on BSC will permeate — and we are ETH evangelists!
The opportunity to leverage both chains to create the product landscape we envisage is going to be massive medium-term.
Q: That’s great. Are you able to give any timeframes for the features that have been mentioned like for example the ability to trade any erc20 tokens as options on the platform and also the vault? Any rough roadmap maybe?
A: The vaults have run their course and were very successful in therms of assisting in liquidity provision and giving users the opportunity to earn great rewards comparable to many yield farms.
Our goal is to spend the rest of Q2 and into early Q3 working on the product innovations mentioned in our roadmap article, here: https://medium.com/options-market/option-market-roadmap-2021-deb82330e2de and the information I have shared here. The conclusion of the Hackathon will give us substanitla forward momentum and the commencement of a trading portal on our UI, which is massively simplified into a single table compared to other alternatives, will be incorporated.
That UI looks like this…
Worth mentioning too
We have completed a logo and branding exercise and these upgrades will come through in the very near term.
Q: Awesome. Thanks for sharing these. Looks like you guys are gearing up for a massive upgrade soon. Let’s talk about the $OSM token. Can you tell us what is its usecase?
A: Initially it started out as a governance token, with all the properties that this encompasses.
Next up — I thought, why could the OSM token not be used for something more? Could it move beyond governance?
What about settlement, perhaps as the native settlement token for the options market?
Next up — AMM trading which is in our thinking. could it be a central liquidity token?
So many ideas, so much scope. After all — 32.5M in liquidity provider pool rewards is a massive incentive for participants — notably 5x larger then Siren — and this become an interesting angel to explore further.
The truth is — because we are not VC-backed nor slave to any external interference — we have the kind of optionality that the project hopes to bring to the market with our token utility.
Options are everything.
Q: That’s what attracted me personally to your vision and I think it’s great, your motto — “We front-run VC’s”
So basically sky is the limit, and $OSM has big potential for many usecases
I was going to ask about more differences with Siren, which your project is a fork of but you already mentioned one. I understand they must be your main competitor? Are there any other differences, which you feel like are important? Also what are other projects that have similar vision/product and can be considered as your competitors?
A: We like to think that the space is so vast — after all it’s a 300–1000 TRILLION USD market (depending on whose stats you believe) in TradFi.
If DeFi gets to a fraction of this value, he opportunity for multiple players will be massive.
Orgs like Opyn and Hegic have done amazing poineering work — we believe that the next level, sept-up, needs to take place and given our combined experience of Dev Ops, management and derviatives (not to mention our relative boomerism!) makes us the perfect project to level-up.
However we like to think we do not suffer hubris
Innovation comes at such a rapid pace, we call on our capabilities to pivot and learn at a faster rate than most.
These are real, core skills. We think they are underestimated thus far. We think not for long though.
Q: Lol boomers trying to make tradfi into defi! Pretty based imo. Sounds good, thanks. No reason to think that you can’t achieve what you are trying to with the skillset that you have and what you’ve built so far.
I might “front-run” some of the community questions, but I saw this talked about a lot and feel like I should ask it — there are many projects under the helm of Degen.VC now, a new one was also recently announced, don’t you feel like that this could spread your resources too much or does everything has a place in the ecosystem you are building, can you give us a brief explanation on this?
A: It’s a really important question.
DGVC was built with multiple project launches in mind, and despite the fact that we have not gained the recognition of many other launch platforms, we have delivered in excess of $20M in value to our smallish LP pool — this maxed out at 680 wallets in the last #alphadrop.
Each project has a specific focus place in the DeFi ecosystem we are seeking to create, and each will have the attention they deserve. For example, OSM is a natural fit for my experience, and our drive to build support teams in dev, marketing and operations for each project is unrelenting.
Much like a project we recently exited, called Behodler, the project gains traction at the right time and explodes into life — a life of its own with a solid community and team that take it to the next level.
OSM will always be my project though — and I will lead it and se it through into its rightful place.
Q: Yeah I saw Beholder it did something crazy like 100x? So you guys came up with the project, found the right team to support it and then let it bloom? That’s just awesome
Paul: A little different — we found the project and team who had this great project and we took it to the 100x level with our Degen Labs capability. But the idea is similar, yeah.
Q: Let’s talk about your marketing plans for $OSM — how do you plan to market it and what has been done so far in this direction?
A: We are using the Hackathon as an indirect marketing campaign — bringing eyes of the dev community to the project.
We are also in disucssions with multiple teams across multiple fronts to work out the optimal path. Arguably the ecosystem is massively crowded these days (and what a pleasure it is!) so bringing strong, consistent messaging and a solid track record of meeting deliverables will help to stand above some of the noise. We are working with a small team of professionals on what’s next.
Q: Do you have plans for any partnerships or are you currently working on any, with other projects that could benefit OSM?
A: We remain extremely close to the Behodler team. We still consider their position to be solid within our ecosystem and this major emerging DEX can leverage an options trading protocol in the short-term.
Many partnerships will arise out of the hackathon especially given the size of the prizes we are offering to kick start collaboration with devs
This is a huge incentive in hackathon terms and we have no doubt that this will result not only in outstanding code, but many opportunities to partner across to ecosystem.
Q: Great, sounds good, all eyes on the hackathon at the moment it seems, hope it’s very successful!
I think that’s all the questions for now, before I open the chat for the community to ask more, is there anything else you would like to share with us?
A: Yeah, just a couple short notes on what we see is the future fro a product perspective.
Things like:
Structured Investment products: a trader embeds an option into a regular investment for a user.
Collars; call/put spreads; butterfly spreads etc: these strategies are formed through the purchase and sale of different option types, in order for a user to pay a simple premium and build exposure to a risk profile.
4th generation or event-driven derivatives: these strategies are deployed when a user has a strong bias to a certain outcome.
Tremendously exciting future ahead!
Innerspeaker | Owner of CryptoMoonShots, [29 Apr 2021 at 20:37:16]:
This is indeed a project to be excited for. I can see it being very useful and with the rate blockchain applications are getting adopted right now, I think you guys have a product that can be used by a lot of people in the real world.
Thank you for this awesome AMA
Community Questions
Q: The opportunity here is tremendous — with the volatility in crypto there are fortunes to be made — especially if you are starting off with a small bag — buying calls could be so $$ — how many coins do you envision having options on ? who provides the liquidity for it?
A: We took a community vote recently and found 3–5 solid alternatives, led by Aave and YFI that were community favourites. Our goal is to start with a maximum of 10 tokens to list initially, where the community is strong. An idea would also be the team we expect to land after the Hackathon, where BSC projects can be considered too, like Safemoon. The community will provide liquidity and be rewarded really well for doing so! We know and understand risk management and will act according to our skills base.
Q: Do the token holders have right to participate in the governance of the project? On what kind of decisions can they vote on about the project?
A: Yes. Governance and decentralisation is very important to us, and so is decentralised governenace. We plan to use a version of the MogothDAO developed by the Behodler dev as a governance underpin. Hodlers will be able to vote on team proposals and initiate their own proposals. Massive flexibility.
Q: Do you have a Token Burning plan to increase Token value and attract Investors to invest?
A: We think that token burning has a place however it feels to us like a mssive unnecessary destruction of value. We have multiple ways to create value, such as sending LP to a 0x address so that it becomes a permanent sink of liquidity for a project. Burning has had it’s time, and it still has a place. We think value for hodlers and traders alike can be derived in far more meaningful, long-term ways.
Q: Does the price of the token matter to you from an operational perspective, If your token price is $1 or $100?
A: This is such a great question. Operationally we are out to build amazing product, and of course while price matters greatly to us as it indicates a level of confidence in HOW our operations are delivering, in a new project with massive long-term aspirations like OSM, we believe that price will inevitably find its natural place as we grow and deliver the outstanding value that we have planned. It is early days and we are willing to persevere.
Learn More
Gitbook: https://options-market.gitbook.io/options-market/
Website: https://options.market
Telegram: https://t.me/options_market
Twitter: https://twitter.com/osmtoken
Discord: https://discord.gg/jPvQYdGU4h
