On Friday, July 15th, Deri launched a Discord AMA with Deri’s co-founder, 0xAlpha. In this AMA, the community’s all questions & suggestions piled up during the time were be answered & fed back. As usual, the AMA consisted of three parts:
Part 1: Report Deri Protocol’s recent updates & improvements
Part 2: Answer all the accumulated questions in Deri’s Discord by Deri’s Co-founder, 0xAlpha
Part 3: Answer all the accumulated questions from Deri’s TG by Deri’s Co-founder, 0xAlpha
The AMA Entrance: https://discord.gg/dQyuBkBKBe
Let’s watch the detailed & complete AMA recap below:
Host: Good Morning/Evening @everyone! Thank you for joining us today. Let’s get started! @0xAlpha , pls go first part: sync the significant updates & improvements Deri has achieved in these days.
OxAlpha: Hi, Deri fellows! It’s been a while since our last AMA. Actually the previous gap was a bit longer as I having been travelling all around the world, from USA to Mid-East to Southeastern Asia.
It’s good to catch up with you guys via AMA. So let me get into this. First, some heads-up!
1. New listing:
deri.io: ETHUSD-1000-P Everlasting Options, BTCUSD-20000-P Everlasting Options, BTCUSD-30000-C Everlasting Options & ETHUSD-2000-C Everlasting Options
2. The second community-build DApp in Deri Ecosystem, deri.lite, has been released by the community.
3. The old V2 DERI-based trading pool was retired and a V3 DERI-based BNBChain Pool was launched to replace it. Please go ahead to BTC & ETH derivatives with your DERI tokens.
4. Updates in Deri Academy (Deri Academy is for newbies and newcomers to learn derivatives trading):
How to arbitrage
What are everlasting Options?
What is buying Everlasting Call Options?
What’s buying Everlasting Put Options？
That’s it for the updates since our last AMA.Now I am moving forward to address the questions that I see in this channel.
Host: Excellent! Now let’s move to the second part, @0xAlpha, Please answer all the questions in Discord.
Q1: What is Deri’s role in web 3.0? When will Deri start something about this direction?
A1: Deri is THE derivative of web 3. It is part of the financial infrastructure of the web3.0 world. Essentially, everything we have done or we are doing is for the web3.0 world. Deri Protocol has been designed in a way that’s super convenient for the other Web3.0 apps to interact with. Also we are talking to other web 3.0 teams for cooperations
Q2: How is the Deri Protocol funding rate calculated to balance the long and short sides of a position?
A2: It’s actually quite similar to how the funding fee in Centralized Exchanges to balance the buy and sell orders shifting the mark price away from the index price.
Taking the futures as an example, when there are more long positions than short, it will push the price above the index price and thus cause the longs to pay the shorts funding fees. This is an arbitrage opportunity for arbitragers to take the short positions to balance the two sides.
Further details can be found in this document
Q3: Will there be some utilities or incentives for the upcoming NFT?
A3: Are you talking about the NFT of the Deri Festival? Yes, there will be utilities for the NFTs! This will be announced right after the Festival. Please stay tuned.
Q4: I know there are very few derivative protocol in Defi that support futures, options and powers, like Deri. Are there any other protocols that provide these services? Or is Deri really a precursor to provide these combined functions?
A4: As far as I know, Deri is the only one with all these three.
Q5: Will you provide 100% security to Deri protocol users’ funds?
A5: Well, I don’t provide any security. The code provides security! That is what you should trust. You might also want to check out the Auditing reports.
Q6: Recently, Deri announced a new partnership with the InsurAce protocol, can you talk about a few points that will provide a more convenient ecosystem?
In terms of ecosystem, Deri Protocol is a protocol. This means that we will build many Dapps on top of it. Can you list the key Dapps built by Deri Protocol? What products are you planning to launch in the near future?
People can buy insurance from InsurAce for the potential loss by Deri Protocol’s smart contracts.
Regarding Dapps on top of Deri Protocol:
Please check out our community website (https://deri.fi/),where you can see the already deployed dapps and the upcoming dapps.
Q7: Deri V1 version encountered attack from Oracle rule vulnerabilities, so in V2 version, does Deri Protocol replace an Oracle solution upgrading from V1 version or use a completely new Oracle? To increase the security of our platform, what security measures will be added to this new version?
A7: V2 adopted new oracle solution of course. Also, I want to remind you that Deri is in V3 already , which has been running without any attacks for several months.
A lot of security measures have been added to V3. Security has been the first thing in mind when Deri V3 was developed.
Q8: Are there any update for limit order? I can’t believe you guys don’t have limit order. Are you expecting user to watch the 1m chart and trigger an order? Why do you need the community to make it? Don’t your developers have the skills to add it, like making a trigger? When price is X ,it will trigger a market buy?
A8: As for now, limit order is still in the TODO list. Per your request, we will go over this topic within the team and see if we will make it more prioritized. Thank you for pushing on this. We will get back to you.
1.BTC 15K, 20k call options & BTC 15K put options
Regarding the BTC options:
Due to the smart contract limit, it’s difficult to support too many strikes so we probably will stick to only 0000 prices for now and skip the 5000 prices. And since it makes more sense to provide out-of-money options than in-the-money options, we will prioritize OTM strikes first. (20000-Call will be provided too if BTC goes further lower.)
Regarding CAKE futures:
Will do a further investigation on the potential trading interest. Meanwhile, please discuss this in the community and let the team know how interested the community is in trading CAKE futures.
Host: Discord questions have all be finished! Now, let’s move to the questions from Deri’s TG groups and leave @0xAlpha to answer them!
1. Except optimizing the product fully (which is basic) & the strength “decentralization”, Deri should do some highlights to attract users.
2. Suggest Deri to add a Trading Strategy Builder
A10: By highlights, did you mean PR activities? If yes, then we are doing a lot of such activities. The most recent one is the Deri Festival. You are welcome to join! https://twitter.com/DeriProtocol/status/1546404529620496384
For “Trading Strategy Builder”, we would need more details from you regarding this suggestion. Meanwhile, some of the DAPPs on deri.fi are essentially for specific trading strategies. But if you are talking about a more sophisticated “Trading Strategy Builder”, please elaborate more on the details. We are all ears when it comes to product improvements.
Q11: In extreme cases, is it possible for the project to hack the LP’s funds? I am talking about the possibility of the project doing evil in extreme cases. I saw that the project can set the Imp in contracts of pools. If the project adds an Imp to transfer assets,is it possible for the project to do evil?
My understanding is that the Imp contract implements the real business logic and the project has the ability to set it up, so in extreme cases， the project can change all the logic, including transferring funds, right？
A11: Great question from a very crypto-style perspective!
First of all, before answering your question, I personally suggest everybody should think and treat projects (not just Deri Protocol but any projects) like you — DO NOT trust the team! Like I said many times, whether the team (including me of course) is a bunch of saints or criminals should not matter. It’s the code that matters! You should never count on us (the team) not to do evil.
OK, back to your question. It’s actually pretty classical and the answer is classical too.
Since Deri V3 adopts the proxy mechanism, in which the implementation can be reset, theoretically the team could touch LP’s funds by resetting the implementation to some “evil code”. That is why a timelock is needed for the implementation reset.
Taking the Main pool on BNB Chain as example, you can see the Admin (who can reset the implementation) is a Timelock Smart Contract: https://bscscan.com//address/0x243681B8Cd79E3823fF574e07B2378B8Ab292c1E#readContract
And you can further take a look into the Timelock Smart Contract: https://bscscan.com/address/0xd2450df2a1017ccb410f2d7710dab5e975f83261#code
Basically it says, whenever there is a reset to be made, it has to wait for at least 2 days. So, whenever there is a resetting taking place (during the 2 day’s waiting period), you can check out the new implementation and see if it is evil.
Should there be anything suspicious, just take out your money and run!
Q12: The biggest advantage of the order book is that it can automatically locate the price; AMM cannot locate the price, and it needs to pass in the price from the outside, which is the so-called Oracle. The DERI project can control the funds of the project by controlling the setting of Oracle.In fact, this is a huge risk for participants (providing liquidity and trading), and the project can completely lock all liquidity and margin through Oracle.
At present I think the biggest risks are : 1. setImp 2. Oracle
The calculation of vol is also used to calculate the signature offline, and vol can also be used to do evil
A12: The dependency on Oracle does not mean “AMM cannot locate the price”. As a matter of fact, one of the functions of AMM is price discovery (Otherwise it cannot be called AMM). Oracle is used in PMM (by DODO) or in DPMM (by Deri) to help with the price discovery. More specifically, Oracle helps the AMM to synchronize with the outside world (other marketplaces) more quickly. The price you see from an orderbook is usually quoted by the market makers, who depend on reading the prices in other marketplaces too (unless there is no other marketplace). For orderbook, this procedure is taken care of by market makers (in a hidden way of course), whereas for AMMs, the synchronization with other marketplaces is handled differently by different AMMs. If interested, you can read this article of mine discussing the topic.
Regarding the “biggest risks” you mentioned:
1. was addressed above in the previous answer.
2. we make sure we use the best oralce available (ChainLink, Wootrade).
However, I want to point again oracle is not the price dicovery procedure itself — it is there to help the price discovery (accelerate the synchronization).
As for the VOL for BTC and ETH, it’s not calculated by us but by Deribit (the DVOL) and passed through to the smart contract. Going forward, for smaller-cap tokens (thus not supported by Deribit), we might adopt some algorithm to calculate the vol on-chain, but the algorithm will be fully transparent and on-chain, which leave no way to do evil either.
Q13: When will privileges for VIP users come out?
A13: Some of the privileges has been implemented already, such as the qualification for liquidators. More will be implemented later this year.
Q14: It s a half of 2022. Any update for our roadmap in last of 2022? Or just following the current roadmap?
A14: We are still following the current roadmap. If there is any change in the future, we will keep you guys posted.
Q15: Will the Deri Festival NFTs be tradable in the secondary market?
A15: That’s probably up to you guys. the definition of “secondary market” is that if somebody owning the object wants to sell and someone else wants to buy, then you can make a secondary market.
About Deri Protocol
Deri, your option, your future!
Deri is the DeFi way to trade derivatives: to hedge, to speculate, to arbitrage, all on chain. With Deri Protocol, trades are executed under AMM paradigm and positions are tokenized as NFTs, highly composable with other DeFi projects. Having provided an on-chain mechanism to exchange risk exposures precisely and capital-efficiently, Deri Protocol has minted one of the most important blocks of the DeFi infrastructure.