There are a host of problems that decentralized options protocols seem to share, namely:
Low liquidity
Unfair pricing — for buyers and/or writers
Lack of composability
Lack of user adoption
Lack of protocol adoption
Unfair arbitrage opportunities during times of high volatility.
Dopex provides solutions to all these problems and offers more value — all without compromising the buyer and seller experience.
What is Dopex?
Dopex (Decentralized Options Exchange) is a decentralized options protocol that aims to maximize liquidity and minimize losses for option writers while maximizing gains for option buyers. This is done in a passive manner for liquidity-contributing participants.
The cost of options on Dopex is calculated on-chain based on the Black-Scholes formula — using implied volatility and asset prices retrieved via Chainlink adapters — and passed through a function to determine volatility smiles based on the realized volatility of the asset.
Dopex uses an option pool model within which users can add liquidity to option pools using base (WETH, WBTC, LINK or other currencies) and quote (U.S. dollar stablecoins) assets. At the end of each epoch, either weekly or monthly, the assets are rolled over into the next epoch, allowing for passive liquidity providing for option sellers. Premiums collected are rolled over into the base or quote assets for the next epoch, and liquidity is reset.
Designed and built by traders, for traders, and with the support of its delegates and early investors who channel billions of dollars in option and derivatives volume every quarter, the Dopex model allows for an ideal experience in the yield-hungry and composable environment that is decentralized finance.
What does Dopex offer?
Deeper liquidity — by allowing users to purchase and swap options with any strike price.
Fair option pricing — the Dopex model allows for the Dopex option chain to be far more realistic and fair in terms of pricing.
Price efficiency — through discounted options with instant arbitrage opportunities.
Minimal risk — by offsetting risk and minimizing losses for liquidity providers with our rDPX rebate token.
Constant yield — users can earn our DPX governance token as rewards for providing liquidity to option pools.
Full collateralization — all options on Dopex have the collateral to back it, thereby eliminating the risk of third-party defaults.
Synthetic assets — users can mint synthetic assets like stocks and indices using rDPX as collateral.
Dual token model (synergy)
Dopex utilizes a dual token model to coordinate new ecosystem dynamics in a synergistic feedback loop.
DPX — the limited supply Dopex governance token, which accrues fees and revenue from pools, vaults and wrappers.
rDPX — the Dopex rebate token for option writers, which offers Dopex a unique edge with user incentives such as:
The rDPX/WETH LP token is usable for DPX farming.
rDPX will be a fee required for future contracts built on Dopex.
rDPX can be used as collateral to mint synths, which can be used to create synthetic options for non-crypto assets.
Fees collected for staking DPX can be boosted with rDPX.
Plans for adoption
With billions in crypto derivatives volume every quarter, there is a need for an options protocol that offers users a more efficient and better overall trading experience. Dopex aims to have the best-priced options in the crypto space, with pooled (high) liquidity that could possibly even rival centralized exchanges.
Dopex will be able to attain retail liquidity while offering the best tools and user experience for options traders. Dopex incentivizes its users with token rewards, arbitrage opportunities, fair option pricing, deep liquidity, as well as block trades in the future. This way, Dopex will be able to offer the best services to both retail users looking to access yield opportunities and seasoned options traders looking to hedge, speculate, etc.
Platform launch
The Dopex platform is scheduled to launch officially in Q3 2021 on Ethereum. In order to mitigate gas fees and transaction times, Dopex will launch on Optimism after it is live.
The current Dopex project roadmap
DPX public sale
The DPX public sale will commence on June 21. Eligible candidates will be able to participate in the DPX public token sale.
For more details, visit these links:
Blog post: https://blog.dopex.io/announcement-dopex-dpx-public-token-sale-81b36d67b7f6
Sale page: dopex.io/sale
Connect with Dopex
Follow Dopex’s official social media accounts and visit its website to stay up to date with everything Dopex.
Twitter: https://twitter.com/dopex_io
Discord: https://discord.gg/dopex
Website: https://www.dopex.io/