Telegram AMA Recap on December 30th
On Thursday, December 30th, we had a Telegram AMA. The following shows a recap of the questions with 0xAlpha’s answers.
Deri Protocol Telegram: https://t.me/DeriProtocol
0xAlpha:
1: Deri Protocol Youtube channel is officially open now, the new videos include the tutorial guides of futures trading, options trading, liquidity mining & introduction of Deri Protocol.
2: On 20th Dec 2021, the total trading volume on Deri Protocol exceeded 15 billion.
All right, let’s go to the questions now.
Q1: It is more meaningful to do a project from the perspective of an educator than from the perspective of an expert. UI versions in other languages also need to be launched as soon as possible.
A1: We try to strike a balance between designing the product for experts and for newbies. Also, we did a lot of “educations”. Non-English supports will be added soon.
Q2: How can APY not lower if the mining rewards slowly decrease? Where those funds would come from? What if let’s say we get 100 mil TVL , what will Apy do ? Will it stay the same? If so, where are those funds taken from or minted from?
A2: APY depends on the price too. When Deri Protocol as a project grows to the next level, the price will reflect it too.
Q3: Check Annex finance, a really promising project. Maybe the partnership would bring extra value to the deri if they could use it as collateral.Or when we stake deri we earn deri +ann and on another side ann holders earn the same in some percentage. This will bring more new users from that side.
A3: Thank you for referring. We will look into Annex.
Q4: Team DOKEN is really making good progress and they have a spectrum of utilities. Pl take a look when u get a chance and they dividend hub, DOKEN do for staking and DOKEN pad is coming. why don’t we make a partnership as well for better establishment and growth for our community?
A4: Will look into this project too.
Q5: Announcement of an announcement very typical in Crypto space. Unfortunately projects started using it 2 years ago. And of course does not lead to anything. We are collecting partnerships that are just projects that share the same VC. You guys just have to check things. Basis, dforce.
Autofarm nothing was made with any of the “partners”. It might just look better to put that we partner up. ( kinda worked in the past I agree) . Seems like that we are 2 years behind strategically wise. C’mon guys just try to be original for once marketing wise and commercially wise. We are following already used paths. This is not fud but people in the space has already seen all those things and it does not work anymore. The product is good , but there are some things that are poorly thought out. I would suggest you all to brainstorm a bit and look at the fact that no matter how many stimulus you give the futures volume goes back to ridiculous numbers. Option volume is just a shiny useless centralized number.
First of all, all criticisms are welcome. Also, you made a lot of suggestions in the community. We very much appreciate all of your contributions. However, I want to point out that we the team are doers. It means we are not just talking about ideas but also building things into reality.
And there is a huge gap between these two!
Let’s face it! Not everything that is talked about could be implemented! Building things is much harder than coming up with ideas!
Therefore it’s totally unfair to bash the team based on the things that we have not done. The whole team has been working our ass off to roll out new stuff, at lightspeed! I am not aware of any other team who rolls out new and original stuff faster than Deri. If you are aware of such projects, please let me know!
A5: First of all, all criticisms are welcome, including this one. Also, you made a lot of suggestions in the community. We very much appreciate all of your contributions.
However, I want to point out that we the team are a group of doers. It means that we are not just talking about ideas but also building things into reality.
And there is a huge gap between these two!
Let’s face it! Not everything that is talked about could be implemented! Building things is much harder than coming up with ideas!
Therefore it’s totally unfair to bash the team based on the things that we have not done. The whole team has been working our ass off to roll out new stuff, at lightspeed! I am not aware of any other team who rolls out new and original stuff faster than Deri. If you are aware of such projects, please let me know!
Q6: If you leave then there will be mostly combot msgs in this grp.
Btw I also will take a break from Deri since based on recent AMAs its clear that adamant deri upper management doesn’t care at all about the deri holders and only care abt the platform traders who just dump the deri rewards. Just to create a temporary inflated volume. And this is not helping deris price, atleast not for some more time. Hopefully it gets better soon.If you leave then there will be mostly Combot msgs in this grp.
A6: It looks like we have different rationales regarding interest distribution between investors and users (including LPs and traders). But that has nothing to do with “Deri upper management doesn’t care at all about the Deri holders”.
Indeed we the team are not just working for the DERI holders. Our mission is to provide an effective and efficient way for people to trade derivatives on chain. Everything we do is toward this destination. If what we have been doing leads you to such a conclusion then I am sorry we might hold different values. If you are looking for a project in which the team is working primarily for the token price, there are tons of them. But DERI is not one of them (then maybe not your cup of tea)
Q7: Will Venus accept Deri as Collateral ?
A7: I hope they do. But eventually that is Venus’ call.
Q8: My proposal : I think that we could propose to vote from buy and burn to recycle to buy and burn forever
I explain my thesis：
At the moment only 1/8 of all the DERI that will exist are available. This as said multiple times makes us (firstly arrived/first hodlers) in a very tricky spot. Because in the next 12 months VC will start unlocking and dumping coins ( you can tell me what you want, but VC dumps every time ) and the current inflation in 12 months time will take us to a supply roughly to 400–450 millions. Even though as you said before the buy and burn to recycle is kinda similar to buy and burn forever , In terms of appeal to have a slight deflationary coin could help out the holders. The thesis about buy and burn forever is not sustainable long term does not make much sense because : if the price of DERI rises you would buy back and burn always less DERI’s and this will be linear, so you will never have shortage of coins long term.
You can go ahead to initiate the vote. If the voting result is to switch our burning rule to “burn forever”, the team will honor it, i.e. we will make the change accordingly.
But I want to explain again that the current burning mechanism is the same as the ETH burning in terms of taking tokens out of circulation. The only difference is that ETH does not have an upper limit on total supply, whereas DERI has one (max supply = 1B). So the “burn forever” approach will have the upper limit be reached earlier than the current mechanism (but it’s still gonna be in tens of years) — that’s the only difference. In other words, you are talking about whether the termination of DERI mining will take place in 2040 or 2045.
A8: You can go ahead to initiate the vote. If the voting result is to switch our burning rule to “burn forever”, the team will honor it, i.e. we will make the change accordingly.
But I want to explain again that the current burning mechanism is the same as the ETH burning in terms of taking tokens out of circulation. The only difference is that ETH does not have an upper limit on total supply, whereas DERI has one (max supply = 1B). So the “burn forever” approach will have the upper limit be reached earlier than the current mechanism (but it’s still gonna be in tens of years) — that’s the only difference. In other words, you are talking about whether the termination of DERI mining will take place in 2040 or 2045.
Q9: How much repurchase funds are there now?
A9: First of all, I want to point out the word “repurchase” is not exactly correct, since there is no “re” part in it. The correct term is “buy and burn”.
As for the fund, the part that has been collected into the fund can be checked out in: https://bscscan.com/address/0x5559eac15d38708d08d95146c63a90a5d84eecc4
And the part that has not yet been collected into the fund (i.e. still held in the pool) can be check out here:
And anybody can collect the uncollected part into the fund by clicking this button.
Q10: After v3 release do you have a big advertising plan?
A10: We always do marketing and PR but we don’t do direct advertising.
Q11 (1): Is it possible to incorporate Metaverse into Deri? It would be innovative and definitely draw some attention deri need.
Deri is part of the financial infrastructure of Web 3.0. Since the whole Metaverse thing is built on Web 3.0, Deri is naturally part of the infrastructure for it. In other words, Deri Protocol was built to be a brick from day one, which is to be used in many scenarios, including Metaverse.
A11(1): Deri is part of the financial infrastructure of Web 3.0. Since the whole Metaverse thing is built on Web 3.0, Deri is naturally part of the infrastructure for it. In other words, Deri Protocol was built to be a brick from day one, which is to be used in many scenarios, including Metaverse.
Q11(2): What plans can the team publish, annual, quarterly or monthly?
A11(2): We publish monthly reports on our progress, on medium. please check out the most recent one:
https://deri-protocol.medium.com/deri-protocol-monthly-report-for-november-bc7511abdc32
Q12(1): Will other functions be added to tokens after V3? There is no specific plan! What is the difference between the liquidity of governance tokens and that of other tokens? Is it possible to give governance tokens a higher allocation amount but less risk sharing function in the case of opponent disk？
A12(1): We are working on adding functions to DERI tokens, but this is not part of V3. V3 is about trading business itself, not about DERI token.
We are evaluating different ideas of empowering DERI tokens. As for “give governance tokens a higher allocation amount but less risk sharing function in the case of opponent disk”, we need to consider the feasibility.
Bottom line is , the team has not forgotten the DERI token. It’s just that we have a priority. Right now it’s the very critical stage to make Deri the go-to place for people who trade derivatives. If we have missed this time window (some other platforms, instead of Deri, become that go-to place), then what’s the point of adding whatever functions to DERI tokens? After all, we are not building a meme coin here, are we?
Q12(2): We need more options to be traded in order to attract the attention
A12(2): We paused on adding more options symbols. this will resume when V3 is launched.
Q13: Could anyone tell me how to calculate the Pnl when i sell a everlasting option? when I sell a everlasting option,whats the meaning of the unrealized PNl？
A13: If you sell (short) an everlasting option, you PnL is the negative of your closing price minus your entry price. That is:
PnL = -(P2 — P1)
where P1 and P2 are the trading prices when you enter and close your positions, respectively.
But you also need to take into account the funding fee (most of the time an income for you).
Q14: Since Polygon reorgs many times per day, curious whether that kind of instability impacts the trade experience or brings any risks?
A14: There is an impact to the trading experience indeed. We received quite some problem reports caused by the polygon network issue. It does not bring direct risk since such instability has been taken into account when designing the smart contracts.
However, it might have indirect risk if your trading nature highly depends on the timeliness of transaction completion, which is not recommended for any blockchain network.
Q15: There is still no certainty about the risk or profitability of the option pool of Deri protocol. There is not enough information to make a judgment. The option pool has a high probability of becoming an option buyer, and has to pay a funding fee continuously. I don’t know yet if enough rewards will be done for this. Looking forward to the AMA for v3.
A15: This involves the overall mechanism of how Deri works and is beyond what can be addressed during AMA.
I will write more on the everlasting option in the future. For the time being, you might want to refer to the white paper for reference.
Q16: The transaction fees are high and uncompetitive. The CEO has always said that he wants to enable tokens, but he does not allow Deri holders to get a discount on transaction fees. Even if the fees are high, the most basic enablement is not given?
A16: I am not sure how you came up with the conclusion that “The transaction fees are high and uncompetitive” since Deri is only the platform providing everlasting options as of now (the ones on testnet do not count). You should not compare the transaction fee of everlasting options directly to the classical options such as the ones on Deribit.
As for empowering the DERI tokens, please see my reply above regarding our priority. But it’s definitely on our pipeline, including the item you mentioned, “discount on transaction fees”.
Q17: Stop loss and profit cannot be preset, which is a joke for option traders. The transaction is easy to fail, and it needs to wait for the confirmation time on the chain, which is also fatal to option traders who count on every second.
A17: Based on your question, mostly like you are comparing the derivatives of Deri to the ones on centralized exchanges. but these are different animals. Right now, indeed there are a lot of disadvantages with the DeFi products (such as lacking of limit or stop-loss orders), but people use DeFi products for their advantages. if things like limit or stop-loss orders or high-frequency trading is what you are looking for, then DeFi platforms might not be the best fit for you, at least at this stage.
Q18: The option design rules are too complicated and there are problems. When the option makes money, there is a chance to be forced to liquidate the position. This is a design that violates common sense.
A18: you did point out a caveat of the margin system: people should not be liquidated when making profit.
However, please note this is due to that fact that everlasting options might be the first exchange-traded derivative that is traded with margin but has a nonlinear pricing relation. Real innovation is not easy. This complicated scenario did not exist before for any of the existing derivatives.
But anyway, this caveat will be fixed in Deri V3.
Q19: What will you do to increase the demand for the coin in V3?
A19: See my reply above regarding the token-empowering.
Q20: Why would people prefer your exchange over other exchanges (eg dydx)?
A20: Deri is a DeFi derivative solution completely on chain, whereas dydx is a half-centralized solution (you see what happened when there was an AWS outage). so people who need a on-chain solution would choose Deri.
Q21: NFTs are hot trending now. Do you have a play to have NFTs in your platform? If so, can you tell us the plans of your project in NFTs?
A21: There is already NFT (as a technology) inside Deri. both our position token and LP token are NFT.
Q22: I see that Deri’s trading volume is really high, this is a really nice thing to see but why doesn’t this have any impact on the price?
A22: The token price is determined by the market. We the team here are to deliver products for our users to use. we don’t decide the token price. never should we.
Q23: Many new projects made a good impression at first but were suddenly abandoned. My question is, how will you manage the project and token to gain a place in the market and become a best token in the blockchain world?
A23: I don’t see any other team delivers things as we do.
Q24: How is Deri protocol protected from flashloan attacks?
A24: This is beyond what can be addressed in an AMA. the short answer is, all the places vulnerable to flashloan attacks have been taken care of.
Q25: Smart contracts are susceptible to failure and many projects fall victim to this, costing users money and the project discrediting. How reliable and secure is your smart contract? Have you tested it through any of the parties?
A25: Our smart contracts have been strictly reviewed and audited by highly-regarded auditors. we also have bug bounty programs with Immunefi to further enhance the security.
Q26: The Whitepaper mentions that Deri Protocol has 2 types of Oracles : OFF-CHAIN and ON-CHAIN, so can you explain what are the differences between using one or the other one?
A26: We try to use ON-CHAIN oracle whenever possible. OFF-CHAIN oracle is only for the scenarios where the ON-CHAIN oracle is not available, such as some of the trading symbols in our Inno Zone.
Q27: Do Token holders have the right to participate in the governance of the project? On what kind of decisions can they vote on about the project?
A27: Yes, please check the “governance” tab of the website.
Q28: Everlasting Option strike price is now few. In v3, can expect various coin and various strike price in everlasting option? And i want to make option pool’s expectation profit and risk more specific.
A28: We will add more strikes after the launch of V3. also will provide more tools to promote the transparency of risks.
Q29: DPMM in perpetual futures is different from in everlasting option?
A29: It is different in V2. but we are unifying this in V3. so that DPMM treats futures and options (and more) consistently. this is one of the key features of Deri V3. please stay tuned for the white paper of Deri v3, which will be published soon.
Q30: BTCUSD-50000-PUT, daily funding is -52.6476. why？
A30: When the option is deeply in-the-money, it behaves like futures. that’s what is going on with the 50000-PUT right now.
Q31: Anyone there? I have a question. BTCUSD-50000-PUT，daily funding is -52.6476. why？Is this a wrong display?
2. Unlike Perpetual Futures, theoretically the funding fee for everlasting options is always positive (i.e. long positions always pay short positions).
A31: Yes, this statement is a little bit imprecise. so let me correct it. (thanks for pointing this out)
The theoretical price of an option is always positive. however, when it’s deeply in-the-money, it behaves like futures. so when there is significant selling pressure that beats the mark price below the intrinsic value, the funding might go to negative.
Q32: When will the 4000p of ETH be added? and when will there be more currency options, such as BNB, dot and other popular currencies?
A32: ETH-4000P will be provided when V3 is launched. please stay tuned.
But the other underlying takes longer time. I don’t have an ETA yet. but we are working on supporting these underlying assets.
Q33: Perpetual options are currently losing money in the mining pool. Is it because there are loopholes in the trading rules that have been arbitrage? Are there any plans to adjust?
A33: As far as I know, there is no loophole. It’s NOT a risk-free design in the first place (just as Uniswap is not designed to be IL-free in the first place ). but we are working on bringing more aggressive arbitrage to protect the LP. this will improve the situation.
Q34: The current application scenario of deri is only fee repurchase, but the current liquidity mining and transaction mining have led to a very large amount of additional issuance. Will there be other application scenarios to enhance the value of deri?
A34: Please see my reply above regarding token-empowering.
About Deri Protocol
Deri Protocol = (Perpetual Futures + Everlasting Options) x Decentralized.
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.
