Weekly-chat Recap -13/04/2020
Participants:
Boris Yang — @BorisYangFNX — FinNexus Founder & CEO
Ryan Tian — @rainiefield — FinNexus Financial Specialist
Question 1:
Nagy szabo: How was the feedback on Wandora?
Max Xutt: We have received good feedback from the community. We shall improve the game constantly.
Boris Yang: We have received some good feedback and we be updating in the next version.
Also, We will update Wandora in next two weeks. We will be adding user panel and few pairs(BTC/USD & ETH/USD) for prediction.
Except Wandora we will develop a new Defi product about option which bring good leverage and risk hedging to users.
Another news is that we are planning to restart ICTO in the next month.
Serg: That is great. We have to start activating our communities for this.
Ryan Tian: Our technical team is working on the next version already. Also more products will be anticipated.
Due to the market conditions, we are sorry that we had to postpone the ICTO before, and we are sorry that we cannot give you guys the feedback sooner. But as Boris said, the relaunch of ICTO will be in next month.
Boris Yang: We have three good news this week.
Professor K: These three things are very cool indeed:
- ICTO coming soon.
- Wandora improvements in next 2 weeks.
- Working on options product.
Question 2:
Dejan Sisokovic: What if the market dumps again? Are we going to postpone the ICTO?
Ryan Tian: No, we will make this schedule a final one. Actually, the market needs real world tokenized assets even more than the pure crypto-initiated ones. It is our job to educated the market and the users.
Boris Yang: It is hard to say how market to go in next few months. We have to push project including ICTO and products.
Discussion: What are Options?
Ryan Tian: As we talked about Wandora before. Right now it is in a new-born stage and we will constantly update it. Though it seems to be a somehow simple model to predict the ups and downs in the market, it may stretch to other product pairs and more complicated models. Decentralized options will be on the radar and will be playing a vital role in the later stages of the FinNexus’ decentralized model.
Professor K: We want to make all of these products work well before we start to wholly decentralize all of their elements. I think this will prove to be a way to make development faster and higher quality.
Professor K: An option is a way that an investor can speculate on the up or down movement in price over a specified period of time.
So, option contracts have 2 important features:
- Strike price
- Time to expiry
If you’d like to bet on an asset going up, you buy a “call option”
If you’d like to bet on an asset going down, you buy a “put option”.
Ryan Tian: So options are contracts, but futures are contracts too and can be used to speculate. Could you specify the differences?
Professor K: I think this options v. futures distinction scares off the regular folk.
Also, because in crypto you have the BitMEX innovation of perpetual futures, which is just mind-blowing-ly risky to a regular finance head.
Boris Yang: How about leverage in option?What do you think the difference compared with futures?
Ryan Tian: The leverages in options are born naturally, relatively to the price movement of the underlying assets’. Like the ETH price moves with 5%, options may go like 25%.
Options have call and put ones. Let’s put the put options in a way of insurance. A buyer of a put options is secured against the risks of the downside of the price movement. Of course, if the price increases, the only loss of him will be the option premium, different from the futures.
Professor K: You can both buy puts & calls and sell puts & calls. That’s what makes them interesting.
For example, if I have 10 ETH and I’m willing to keep them or sell them for $180, I can sell calls today to someone else who maybe doesn’t have enough money to buy 10 ETH but wants to speculate on the value of ETH going up to that level within a specified time period.
Ryan Tian: Right，the put option sellers/shorters will be like insurance sellers, and they are expected to earn the premium on these options, while undertaking the relating risks.
Boris Yang: What do you think about make it easier to understand by investors? Actually option is interesting but too complicate in strategy.
Professor K: I think you say, “Here’s a way to bet on ETH price without having so much money.” OR you tell ETH whales, “Here’s a way to earn money on your inactive ETH stash by selling options and collecting the premiums.” Or it could be any token we want to create a market for: BTC, WAN, FNX, USDT, etc.
Ryan Tian: The most liquid ones. We would think more carefully with the less liquid ones, due to the high leverage and more easily-manipulated naturally.
Firstly, the we would like to start on wanchain, with its WBTC, WETH.
Professor K: Yes, and this would work nicely on WRDex and as the Storeman nodes spin up.
Ryan Tian: Also we are evaluating seriously on ETH as the ERC-20 option tokens.
You may know Opyn. They are like the first one in this field on Ethereum.
And in Deribit exchange, there are growing centralized options market.
We believe the market is ready to have a more understandable, and decentralized options platform.
Professor K: Opyn is decentralized, isnt it?
Ryan Tian: Yes, it is decentralized and the option products are transacted on Uniswap.
Professor K: Unless the Uniswap liquidity pools are exceptionally deep, I don’t see how that would work without massive price movement either way.
I would prefer to transact options in a conventional book.
Boris Yang: I think they supply liquidity by themselves at the beginning.
Yes except oracle data. Other functions are decentralized(Opyn). In tech side it is not too complicate.
Ryan Tian: We are thinking of intensively interoperating with the Wanchain’s cross chain functions, to have WBTC and WETH on Chain in the options smart contracts.
Professor K: Something could be done to incentivize whales to write covered options contracts and contribute to the pool.
Boris Yang: They have to hedge risk when selling.
Ryan Tian: They are the ‘whales’ and the pool in the initial stages. Though not a big one. Yes, that is very important. But at this stage, the education of the market is crucial.
Even if not 100% hedging, the option sellers need to do something about it.
Professor K: You know what Eugene Fama says! “There’s no such thing as a free lunch.”
But we should be able to design a system that compensates them well for the risks they undertake in providing liquidity.
Boris Yang: I think we should find some professional sellers. Liquidity suppliers and sellers have some differences.
Ryan Tian: We are building the market.
First of all, we would like to thank out community for taking part in the Wandora box competition and providing valuable feedback.
Sarah Huang: Thank you everyone for your participation. It is great to have free discussion with the community. Thank you again!
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 with value based on real-world cash flows.
Website | Newsletter | Whitepaper | Telegram | Twitter | Linkedin | Facebook
