Show HN: DeFiOptions – ERC20, collateralized, cash settable options on ethereum
github.com
github.com
Derivatives trading in ethereum is still incipient and somewhat inefficient. For instance, there is a lot of competing option trading protocols [1] (mainly for crypto assets) each one with it's advantages and disadvantages, and one of the most popular, Hegic [2], employs liquidity pools pricing options at an expensive value due to a simplified pricing model (good for writers, but not for buyers).
I believe the advent of stablecoins and innovative DeFi protocols are laying the foundations upon which more accessible and efficient solutions will be built. High transaction fees and low throughput still need to be dealt with though, ETH2 is promising a lot in this sense, we will have to wait an see.
Nonetheless I understand that hedge funds and major financial institutions don't see much value in this space yet at its current stage, in regards of trading derivatives.
[1] https://medium.com/coinmonks/an-update-of-a-comparison-of-de...
What are you using as your Numeraire? DAI?
Had to read about what Numeraire[1] means for answering, didn't know that concept!
My approach was to treat all accepted stablecoins as having the same value pegged to the USD.
Upon depositing tokens a conversion is made to normalize the value that is added to the address balance in the exchange, since different stable coins may have different decimal places in their representation.
You can see this code here in the "depositTokens" function of the "CreditProvider" contract:
- https://github.com/TCGV/DeFiOptions/blob/master/contracts/fi...
The "token conversion rate" is applied in line 85 to the deposited value.