FinNexus Weekly-chat recap 02/06/2020
Participants:
Boris Yang — FinNexus Founder & CEO
Ryan Tian — FinNexus Financial Specialist
Ryan Tian: Good news is that we have made significant progress on our options model last week. You will hear more from us on the same in a few days. We are working on next move on products, marketing and exchange.
The conversion is happening everyday and the circulation is decreasing.
Question 1:
Said Leee: Any plans for Staking?
Boris Yang: Yes of course. Staking combined with BTC options products. What do you think about XRP options?
Danny: Any plan for staking from Wanchain mobile wallet?
Ryan Tian: Well, FNX works quite differently from WAN. The staking mechanism will also be different from WAN, which is from POS.
Question 2:
Max Xutt: Could you provide more information about XRP options?
Boris Yang: We will start from BTC options. So I am thinking about XRP options. We want to do something useful for XRP community in which there are lots of our supporters.
Max Xutt: How much do you think the APR could be?
Ryan Tian: The APR will be much, much higher than the normal borrowing and lending protocols, due to the different risk-return profile in the options.
Max Xutt: Great. I know Ryan is a financial expert, why don’t you tell us the difference between the Option product and other DeFi products?
Ryan Tian: An option is a binding contract that allows you (as the buyer) to sell or buy an underlying asset (goods, stocks, indexes, etc.) at a predetermined price within a set time frame. You as the buyer of an option contract, have the right, but not the obligation, to buy or sell the underlying asset.
That’s the big difference between options contracts and futures contracts. With futures you are obligated to take delivery of the underlying asset.
With options, in order to get that right to buy or sell a particular asset at a predetermined price, you have to pay the option seller a price, which is called the option premium. This is where the returns of the option sellers are coming from.
But you, as an option buyer, will be granted with the right to buy or sell the underlier at a predetermined price; with which, you can insure, hedge or speculate the price of underlier, and possibly with leverages.
That’s the fun and beauty of an option contract. The rights and obligations of buyers and sellers are unparalleled
For example, a fruit store wants to buy 500 kg of apples from an orchard owner, but the apples are not ripe yet until August. The fruit store worries about the rise of the price, affected by drought this year. Therefore, it reaches an agreement with the orchard owner, that it may purchase the apples at the price of $4/kg in August. But it doesn’t have to do so if there is some cheaper price on the market. In order to have this right, the fruit store pays the orchard owner $100 as compensation.
Max Xutt: Thank you for this informative answer.I’m not a finance major, but I think these explanations are enough for a beginner like me.
Is there a similar competitive product on the market now? What are the advantages of our upcoming product?
Ryan Tian: Yes, also the options are quite common in traditional finance, in crypto market, these are not often seen. We have some centralized exchanges like Bitmex, derbit, providing these products; and decentralized platforms on Ethereum like OPYN and Hegic.
OPYN and Hegic are quite young and small, while Hegic has been attacked twice. We want to provide something more advanced than them.
Max Xutt: Ah I see, that is one of our advantages, how about the return for users?
Ryan Tian: Firstly, for the FNX holders, FNX tokens will actively participate in the creation of the option tokens, by locking them up in the options smart contract and minting option tokens. These collateralized FNX holders will be rewarded with the distribution of options premium.
Secondly, FNX holders will be much benefited by distributing the fees and commissions from the transaction and brokerage of the market.
Third, FNX will be one of the trading pairs for the liquidity of the options, therefore another important use case for FNX tokens.
Serg: When will FNX holders be able to actively participate in the creation of option tokens?
Ryan Tian: The alpha version will be tested at the end of this month.
Question 3:
Danny: What will be the next partnership in pipeline for FinNexus?
Ryan Tian: It will be around our decentralized options model.
Boris Yang: We will give FNX incentive plan soon combined with Options products.
Nagy: The good news seems to be coming this month?
Ryan Tian: We will educate the community and market step by step from next week. In order to make this model launchable with FNX, we have to give FNX a comparative fair market price, that’s why we have to do it after listing.
Professor K: The first step for a lot of these items is getting the token distributed and having FNX markets available for people that want to participate in the rollout of the options protocol. We’ll need a wide base of token holders to contribute collateral to the liquidity pool(s) that backs the options.
Question 4:
Roja Saja: Can you explain why the price is so stable? Is it due to the conversion price of $0.1?
Ryan Tian: Well. IMO, because of this mechanism, people can always convert at 0.1, so they would like to wait. There is already something protecting the price. Still, in the early days of listing, selling power from airdrops and impatient users are high, these two forces make some balance in the price.
Question 5:
Sami: Will FinNexus offer loans?
Ryan Tian: Not currently in our roadmap. Already too many platforms in this battlefield. We would rather like to interoperate with them than compete with them.
Professor K: If it helps in providing liquidity for options, we could just plug into Aave or Compound. They even have programs where they share fees, which if we did would just go into the SAFU Fund and Variable Issuance Pool.
Question 6:
Victor: Do you plan to have any new listings soon?
Ryan Tian: There are some thoughts, but we would rather put our major energy on the products in the coming days.
Also, due to the recent scheduled and unscheduled meetings, the weekly chat time may not be fixed to a certain day each week. We are sorry about it.
Veer Singh: Thank you everyone for participating in the weekly-chat discussion. Like always a recap of the weekly-chat will be updated on our medium blog for everyone who missed it!
About FinNexus
FinNexus is building an open finance protocol to power hybrid marketplaces that trade both decentralized and traditional financial products. The FNX token will live on the Wanchain blockchain to take advantage of the most robust cross-chain capabilities currently available in the industry. The first products FinNexus plans on releasing will be innovative tokenized assets (available Q1 2020) with value based on real-world cash flows.
