On Wednesday, May 4th, Deri launched its first Discord AMA with Deri’s co-founder, 0xAlpha. The theme of the AMA was Arbitrum launch at May, 5th. The entire AMA contained 3 parts of contents.
Part 1: Sync Deri Protocol’s update, and announce the winners of the trading competition on Arbitrum Rinkeby
Part 2: Answer all the questions in this Discord ama channel
Part 3: Answer the questions that were sent in the telegram groups
The AMA Entrance: https://discord.gg/dQyuBkBKBe
Let’s watch the detailed & complete AMA recap below:
Host: Good Morning/Evening Everyone! Hey everyone, thank you everyone for joining us today. Let’s get started! @0xAlpha , pls sync the updates and announce the winners for trading competition on testnet~
0xAlpha: GM! My dear Arbiters and Deri fellows! Let’s first congratulate the winners of the testnet trading competition on Arbitrum Rekinby. Thank you for your participation and feedback.
The 3 most helpful, impactful, or detailed feedback coming from @putrast4#8711, @yuanlai, @WhyItDoesMatter#1488
The 10 lucky traders are: @ade kurnia, @Mapa, @keyur560#6619, @ViLi, @wans, @Aiedropp #4708, @swinzou#5895, @billzcollecshunbit#8041, @sfirmn11#9345, @mrshahiii#6649
Host: Congratulations to the winners! Prizes will be sent over the next 1–2 days. Now let’s get updates on the latest and greatest at Deri Protocol.
0xAlpha: Getting ready for tomorrow’s launch on Arbitrum has been hectic and fulfilling. Yep, we are coming! Don’t forget to mark the date: May 5th, 2022. Stay tuned!
1. As a further step toward decentralized governance, AMM liquidity mining has switched from cross-pool consolidated mining to smart-contract-based single-pool mining, the smart-contract-based single-pool mining is live NOW! Click here for the details. LPs need to get familiar with the new interface. But I believe it’s intuitive.
2. The liquidator qualification module from Deri V1 is reactivated now! While everyone is encouraged to participate in liquidation, liquidators are required to stake DERI in the “privileger” pool with a staking amount no less than the average level. Please refer here for details.
3. Our goal is to continue to launch new trading symbols, we’ve listed FITFIUSDT Perpetual Futures recently. Go long & short FITFIUSDT with up to 10x leverage on BNBChain.
Host: Excellent! Now let’s move to the second part, 0xAlpha, please answer all the questions from the community.
0xAlpha: OK ! I am starting with the questions I see here in discord
Q1: Will it cause the speed of mining on Arbitrum? What is the biggest difference between trading on Arbitrum & trading on BNBChain?
A1: I guess the first question is asking whether the mining on Arbitrum will accelerate the inflation of DERI? If that’s your question, you don’t need to worry about it. While the DERI mining on Arbitrum will increase the DERI inflation, we will consolidate our liquidity pools on BSC and retire the Future-Main pool (the trading symbols will be moved to the other two pools on BSC). In other words, we add one pool on Arbitrum and remove one pool on BSC. So overall the mining speed doesn’t change. Plus I believe the new trading volume on Arbitrum will cause more DERI-burning, which is the most effective way to counter inflation.
For the 2nd question:
Higher leverage is offered on Arbitrum (25x) than on BNBChain (12.5x) due to the higher TPS on Arbitrum. And my personal experience is that Arbitrum is a bit faster and smoother than BNBChain. Other than that, there is almost no difference.
Q2: I know the qualification module is reactive again! Except that the Deri tokens are used to be staked by liquidators, what will be other use cases of Deri tokens?And Your twitter is talking about Arbitrum launching recently. But currently, there is still no official one. When will Arbitrum mainnet be live on Deri Protocol? I mean the specific time
A2: Other than bringing back the liquidator qualification of V1, we will add more utilities to the DERI token tool. A number of utilities will be based on our partnerships with other projects, which are being discussed. Please stay tuned for this. As for the launch on Arbitrum, we are on working on the final steps. This will take place within 24 hours!
Q3: what’s difference between Arbitrum and BNBChain from Deri product perspective?
A3: For now the differences are:
1. the leverages (25x vs 12.5x)
2. At the beginning, only BTC and ETH (but with futures, options, powers) are provided on Arbitrum. But this will change as we will soon add more. In the very near futures, on Arb there will be as many trading symbols as on BNBChain.
Q4: There are GMX on Arbitrum, why shall I trade on Deri Protocol?
A4: Great question!
GMX is a great product. However, technically, GMX is not a derivative platform. Instead, it is margin-based leverage spot trading (meaning you actually buy the spot with money you borrow, and hold it). That is indeed similar to futures but not as flexible.
The flexibility of the leveraged spot trading like GMX’s is limited in two dimensions:
1. It can only provide futures-like linear leverage. It cannot provide nonlinear leverage like the other derivatives such as options, powers. In other words, if you want things like options or powers, you have to come to Deri.
2. The trading symbols are bound by the tokens in their pool. Currently, other than the stable coins, GMX only has ETH, WBTC, LINK, UNI, which are the only things you can trade on GMX (unless they add more tokens into the pool). Whereas, as a derivative solution, the trading symbols on Deri are only bound by oracle’s support. On BSC, as of now we support near 20 trading symbols (and keep adding). That will also be the case for Arbitrum. Going forward, we will even implement permissionless market creation, which will further open the symbol space for trading.
Just give it a try, you will immediately tell the difference between Deri and GMX.
Q5: The Deri token is a governance coin? what is the utility of the Deri protocol token?
A5: It is governance token + privilege token. Please refer to this document
Q6: It is known as the truth that the trading futures and margin on Deri protocol is not risk free. Now my questions are: 1. Is there a tutorial about risk management for starters who trade on Deri protocol 2. Can you tell, when is it likely for a position to be liquidated?
2. When you open a position, on your trading panel there is an estimated liquidating price. You should pay attention to that price. If the symbol price is getting close to it, you need to close your position or add more margin to avoid liquidation.
If you are a beginner, I strongly suggest you start with small leverages.
Q7: Does Deri team care about their token holders a bit? -92% down in a ranging market, that is something I have never seen before. Liquidity mining is obviously killing the token, is team actually going to do something?
A7: well, at least we are still here , and working on it!
Liquidity mining indeed causes inflation which puts pressure on the price. But Deri is not in a mode that could function without liquidity mining. At least not yet. We are doing everything on this — promoting the usage of the protocol so that more transaction fees will be paid and captured as protocol fees, which will be used to burn DERI. As long as there are more DERI burned than mined, the DERI token becomes deflating.
That’s the only way we can succeed (and we are getting there). Otherwise, how else would you suggest? Just turning off the liquidity mining just because it’s causing inflation? That’s obviously not gonna work! (In fact, that was tried on Polygon. Just take a look at the how Deri looks like on Polygon.)
Again, new mined DERI would NOT be a problem if we could have enough trading volume to generate enough protocol fee to burn more than newly mined. That’s exactly what the team is working on. And you can help with that too (instead of simply complaining about the liquidity mining)!
Q8: You said that 60% of the total number of tokens in the white list will belong to the miners. If a miner holding a token in his spot wallet sells or buys in a way that affects the price, what risks do futures traders pose for us? Do you have a plan to protect your futures users if this happens? Will you have agreements with different exchanges to get more recognition? for example, Arbitrum’s investors include Okex, while leather is not listed here. Wouldn’t it be better to deal with known exchanges? In this way, wouldn’t their manipulations be prevented and investors like me protected? I wish you good work.
A8: Thank you for suggesting the exchanges. We are working on the listing. But we cannot disclose the progress per the agreement. So I have to ask for your understanding of this. You don’t want me to disclose the info here to jeopardize the listing either, right? We are on the same boat.
Q9: What’s plan of Deri team to make Deri price increase again?
A9: As a team, we do two things: 1. Optimize the product 2. Promote the product. These two things will lead to a result — larger transaction volumes, which means more protocol fees to burn DERI. That will eventually increase the token price. And it’s the only way that works in the long term.
Q10: With the Arbitrum network live on Deri and various other existing networks soon to come, propelling the future of multi-chain, how often does Deri Protocol plan to do Bug Bounty programs and Campaigns to make it’s DEX and Protocol insusceptible to hacks and exploits?
A10: Bug bounty is not a question of “how often”. It’s always on-going. Check it out here And we will cooperate with more platforms for bug bounty.
Q11: Partnerships are like supplements where the combination is beyond the individual level. Can you name some of your newest partners that can help Deri protocol ? Are there any partnerships to be made in the near future? can you tell us with whom?
A11: We are in talks with some future partners. Stay tuned.
Q12: How do you keep your platform safe for investors and is your platform guaranteed to be protected from hackers and what makes investors, customers and users feel safe while working with Deri protocol?
A12: Guarantee is a strong word. We cannot guarantee but we try our best. So far, Deri’s track record on security is not bad at all. meanwhile, you can check out the audits
Host: Thank you guys for all the questions! Now I will continue with the questions that were sent in the telegram groups.
Q13: 20% of the transaction fees earned will be put into a DAO fund, which will be used to regularly buy DERI from the secondary market and burn (i.e. recycled to be mined again).
So the burn doesn’t really burn for ever? Can be reminted?
Sounds a bit like the DERI-holders don’t really benefit that much if this is the case.Are these 20% of fees both liquidation-fees and regular platform-fees (+interest?) Anyway seems a bit low compared to for instance Unidex who gives 50% of all fees directly to holders. Any plans to change this?
Can we please get some clarity on this?If it’s basically only a VIP kind of governance token, not real economic utility, I don’t see a reason to hold. I suggest 20% of fees to go to burn tokens infinitely (no remint), 20% is airdropped to holders of the token, 10% of liquidations airdropped to token-holders.The protocol earns a lot of money as it is, giving 20% to holders would be the right thing to do.
Holding should be incentivized not penalized. I am pretty sure that this model will not change but I am glad that other investors are waking up to this problem as well
A13: DERI’s burning mechanism is just like ETH’s 1559, in which if more tokens are burned than mined, the token is deflating. We will write an FAQ to further explain this.
For right now, in short: In terms of taking DERI tokens out of circulation, burning it to mining vault is the same as burning it to address 0 (or something deadlock pool). The only difference is, the mining in the former mode will last longer.
Q14: How about we actually stop abusing those liquidity pools? Team should be pulling away the liquidity incentive that was received from Binance. How much was it and how much of the tokens has the team it self mined/dumped?
A14: I am not sure what you meant by “stop abusing those liquidity pools”? If it’s referring to turning off the liquidity mining, it’s not gonna work. (In fact, we did that on Polygon. Just check out what’s going on there.)
As for Binance’s incentive, it was distributed through the trading mining programs. Please check the past records. We are applying for more. Once approved, will keep you posted.
The team has not sold a single DERI from its holding
Q15: Seek to attract more users to the protocol with the incorporation of new networks.
A15: We are considering more networks, including Near, Avalanche, Moonbeam, etc. Meanwhile, please let us know which networks are the best worth deploying.
Q16: What other steps do you have in mind in the short term to grow the project?
A16: In the coming weeks, we will focus on boosting the trading volume, especially on Arbitrum.
Q17: #Futures #Options Why leverage is limited to 12.5x ? why not 30x-50x?
A17: Leverage is determined by risk management considerations. One of the determining factors is the network speed. On arbitrum the leverage will be increased to 25x, thanks to the higher speed.
Q18: Is there external custody on Arbitrum? Which protocol will you cooperate with?
A18: Yes, external cusdoty is the core of Deri V3 so it’s a must. On Arbitrum we cooperate with AAVE (V3).
Q19: Is there any plan to adjust Deri’s tokenomics? For example, “VE”model,discount on staking fees, etc
A19: VE model is being discussed internally. Meanwhile, please discuss in the community, and initialize a vote if you want.Fee discount is in the pipeline.
(But I want to point out that VE model only works when the protocol captures enough value, e.g. transaction fees. So promoting usage and transaction is still the key even if we adopt a VE model)
Host: That’s it everyone! Thank you for the good questions and feedback!
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.