Notice on adjusting DPMM parameters
Deri V3 has been running smoothly for over half a year. Based on our ongoing observations, some of the initial parameters were set to be conservative. We will make a series of changes to balance the parameters for liquidity providers and traders.
- The “sensitivity parameter” of the Futures DPMM will be adjusted. This parameter was set to be conservative when Deri V3 was deployed. Now with Deri V3 being live for over half a year, it is time to adjust this parameter to the normal level. After the change, the futures will have smaller slippage.
- The margin requirement of the Main Pool on the BNB Chain will be decreased by 50%, to be the same level as that on Arbitrum. Again, the margin requirement of this pool was set to be conservative when it was launched. And now it is time to adjust it to a more proper level.
- The min Initial Magin parameter (0.5%) in the everlasting options will be dropped. This parameter was also in place to be conservative when everlasting options went online. Now it is time to drop this protecting parameter. After the change, the far-out-of-money options will require less initial margin.
- The everlasting option will switch to a simpler transaction fee rule no longer differentiating ITM and OTM options. The transaction fee of one unit of option is 0.1% of the notional value (for OTM and ITM) but can never be higher than 5% of the Mark price. Namely, transaction fee = min(0.1% * Notional Value, 5% * Mark Price). (Please note that this change does not impact ITM options at all, and trading OTM options is still of very low cost. For example, the current Mark Price of ETH-1000-P is around 0.8$, so the transaction fee of one ETH-1000-P is 0.04$.)
We will continue to work to improve the Deri Protocol and are confident that with everyone’s effort, the Deri Protocol will continue to get better.
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.