Telegram AMA Recap on October 22nd
On Friday, October 22nd, we had a Telegram AMA. The following shows a recap of the questions with 0xAlpha’s inspiring answers.
0xAlpha:
It’s been a while since our last AMA. I see tons of questions got piped here in the group and I owe you all the answers! Will take care of them in the next couple of hours (hope this is doable in a couple of hours😂)
First of all, regarding what has been keeping us busy. As you know we rolled out the Trade-to-Earn program over 1 week ago, which has a tremendous effect. The trading volume on Deri has rocketed! You can check it out in our stats/info site here:https://info.deri.finance/?locale=en#/info
For the coming weeks/months, we have a lot of things to roll out. In a few weeks, we are gonna have a small upgrade: Deri V2 -> V2.1. In V2.1, the trading mechanism of Futures and Options will be further unified in one framework and the funding rate mechanism will be more consistent across Futures and Options. In V2.1, the funding rate would be also easier to understand for those who are familiar with the price-based funding, e.g. that on Bitmex or Binance Futures.
Meanwhile, we also kicked off the development of Deri V3. Please stay tuned for all the upcoming milestones in the next several months.
OK, time to address the questions.
Q1: will the team have an update for the UI theme?
A1: Yes!
We are cooperating with a new design lab and working on the next version of our website.
Speaking of this, the design lab will have interviews with several Deri users to collect feedback regarding the UX/UI of the current website. We are seeking volunteers for this. Please contact the team (@archus & @dev_deri at telegram) if you are willing to provide your feedback to help improve our UX/UI.
Q2: Being futures trading tricky for CEX at this stage, and knowing that most CEX derivative traders use BTC and eth as collateral to hedge or speculate. why don't we have and why don't we add WBTC e ETH as collateral to trade with?
A2: I think you were referring to the “Inverse Perpetual” provided by CEX such as Bitmex, Deribit. We actually have a more advanced margin model than those traditional “Inverse Perpetual” that only accepts the trading object (e.g. BTC or ETH) as collateral — our dynamic mixed margin accepts multiple base tokens. For example, our future trading pool Main Zone on BSC accepts BUSD/BNB/CAKE. And we are adding more. As for WBTC and ETH, we are considering these too — we need to make sure the base tokens we choose are liquid enough (BTC is of course the most liquid asset in the crypto world but that’s not necessarily the case for WBTC on BSC).
(BTW, Deri V3 will have a way better solution on this part.)
Q3: So how does the liquidity share value move then? Or is it fixed?
A3: It is not fixed. Liquidity Share Value is like when you invest in a fund you would have a fund share value. When the pool has a positive PnL, it will increase. Whereas if the pool has a negative PnL, it will decrease. When you provide liquidity to the pool, your profit of the base token (additional to the APY of DERI mining) is reflected and realized by the increase of this Liquidity Share Value.
Q4: Hi, guys. What’s the difference between future and option? Could someone provide me some guidance?
A4: Please refer to this FAQ:
Q5: What is trading fee, higher or lower compared to DYDX?
A5: The trading fees of different contracts are all different, you can find them in the “Contract Info” panel of the trading interface.
Q6: Any good benefit/reason if I hold this coin?
A6: That is a big question. Might be a bit too big to comprehensively address during AMA. But we summarized it in this section in our docs:
Q7: Will your project launch any programs to increase prices in the near future?
A7: I assume you are talking about the price of DERI token. We (the team) is responsible for the product development and operation. As for the DERI token price, that’s up to the market.
Q8: How much daily fee is required to hold 50000 strike price BTC call option right now and if BTC rises from here do I start earning or I will earn only if BTC rises above the strike price
A8: Good question about the everlasting options. It’s a bit more dynamic than that. The daily fee is determined by the mark price and the intrinsic value. You can find details of this in our docs site (docs.deri.finance) or whitepaper:
https://github.com/deri-finance/whitepaper/blob/master/deri_everlasting_options_whitepaper.pdf
As for your example: say you long a 50000-C, if BTC rises (e.g. from 40000), you start to have a small earning below 50000 and you will have a large earning when BTC rises above 50000 (your PnL will be roughly linear to BTC’s increment above 50000).
Q9: Hi! Well, here is the position now. It seems overkill to me to hold $1000 of collateral for a position that has increased in value from $3 to net $19 or so ($41-$22). I understand that the price is close to the strike and therefore more collateral is held but looking at it a different way -> I have made a small profit and the system is holding more collateral which I would have expected if the position moved against me…I guess I’m suggesting this approach is penalizing success…
A9: I get your point. but just like I explained in the previous one: While your PnL is small when OTM (out-of-money, i.e. underlying price below strike), once the underlying price moves to the ITM (in-the-money) range your PnL is gonna change much faster. This is all because the PnL of options is not linear (please see the figure above). The margin requirement was a very careful design with a lot of factors taken into account, not just the PnL you would make at the current level.
That being said, the margin requirement of everlasting options is tricky indeed, partially because this is totally innovative stuff (first-ever on this planet!) so there is nothing you can learn from. If you have any suggestions regarding the margin requirement, you are more than welcome to send them to us!
Q10: You announced about 10 days ago that some tokens would be burned for a more decentralized structure, still no news?
A10: I think you were referring to the announcement that the operation team will donate most of their pre-allocated tokens to the treasury for operation purposes.
(Please note these tokens are not to be burned tho. They could be used to boost our ecosystem, why burn them? The only case when DERI tokens will be burned is that when the protocol fee is distributed into the DAO fund it will be used to buy DERI from the secondary market and burn, per DIP1. There has been some accumulation of this already and we will carry out our first DERI-burning sometime in the future).
As for the part of DERI tokens, you were asking about: the part of DERI tokens donated by the operation team has already been transferred to the treasury’s account. Recently there were some investments (Wootrade, QCP) that were made with those DERI tokens (the investors bought DERI tokens from the treasury as OTC deals). The rest of the tokens will be used to do a lot of things going forward, such as the Deri ecosystem fund. We will roll these out one by one.
Let me add a little bit to this. By giving up something granted, the operation team did a very nice thing. Please note they don’t have to do at all. When somebody did something nice, you might want to pay some respect.
Q11: How often is the buyback &burn carried out? why has it not been carried out since March?
A11: We don’t have a specific algorithm for that yet. You can make suggestions to us regarding the frequency/algorithm of the “buy & burn” of DERI tokens.
As for why it’s not carried out yet, we felt like the trading volume had not grown to a significant level yet so the accumulated protocol fee was not quite large for a meaningful buy&burn action. But this might change in the near future since the trading volume increased a lot since we kicked off the trade-to-earn program.
Q12: It is suggested that the transaction fees should be automatically bought DERI back and burned from the market every day, instead of being collected by your team for a few months before starting to burn, which is not smart at all.
A12: Interesting suggestion!
I think there was a similar suggestion for BNB (a real-time burning mechanism) recently proposed
(https://github.com/binance-chain/BEPs/blob/master/BEP95.md)
My instant opinion for this is that there are pros and cons for this mechanism. But we will discuss it within the team. We all want to carry out the buy&burn procedure in a more efficient & effective way!
Q13: 0.25% of DAO fund from DIP vote should be used each epoch to buyback Deri and burn on the open market with it doubling to 0.5% of the fund if Deri is down >5% in 24 hours and 1% if down >10%
A13: Will discuss this algorithm internally with the team.
Q14: In the BSC network only DERI stake APY19%. Don’t you think this is too low?
A14: The real question is whether LPs think it is too low or not.
Obviously, those that are currently LPing there don’t think so. The 19% number is determined by the market. If LPs are not comfortable with it they would remove liquidity and the APY will increase until LPs are happy and balance is achieved. So whatever number out there is a result of market balance, be it 1% or 100%.
Q15: Hi, how to become a liquidator?
A15: Taking the Perpetual Futures on BSC as an example, this is the function you need to call.
As for how to call this function, you need to know smart contract programming.
BTW, quite a few people (additional to us) are doing this already. There is even a competition for liquidation.
Q16: Is there any API?
A16: API is not needed as the exchange engine is programmatic in the first place. even our website is really a wrapper of the smart contract. API would not add any value and it would even slow you down if our API server is not as fast as your connection to the blockchain.
If you want to trade programmatically, please take a look at our demo code here:
https://github.com/deri-finance/demo
Q17: Another consideration: as @ElDiabolo just said perp now is live on woo which is a big platform that has tons of liquidity locked in and lots of users. Our big deal it could be to integrate Deri functionality on a big spot dex: like pancake, sushi, 1inch etc. I mean a real integration like that if you are on the pancake UI you can trade derivatives on their platform through Deri
A17: Interesting idea. We will discuss this with some of the spot DEX and see if we could form such partnerships. It makes sense to me.
Q18: Everyone would talk about us if we make people hedge and speculate on nfts collections
A18: yep I noticed this paper by Dave (I actually talked to him regarding this one too). I think some of the things Dave came up with in his papers are more for conceptual purpose. As for this floor perp, I am still thinking about its potential popularity.
Q19: Why is the annualized income of single pledge of bus, USDT and cake higher than that of single currency pledge of DERI. If so, is the official indifferent to the blood-sucking of fans holding deri token. If the authorities don’t trust their own coins, is deri token worth holding?
A19: Again, APY is really the market’s choice, not our setting. Every pool has its allocation of DERI mining per the parameter set. If a lot of people choose to stake their DERI into the DERI pool, it will decrease the APY. Imagine if people had decided to stake 10 times of the current amount of DERI into the pool, the APY would further decrease to 1/10 of the current level. I hope you get the point that the low APY only means a lot of people want to stake DERI into this pool (especially so since last week because staking in this pool could increase your boosting factor in the trade-to-earn program).
In short, the APY is a market choince, be it 1% or 100%!
Q20: What next update on DERI?
A20: A lot of things! please refer to what I said at the beginning of today’s AMA.
Q21: Hi admins, are you guys thinking to create vaults like this that use options in the strategy in order to achieve an apy for the asset provider? This could allow amateurs to indirectly use options trading and it could increase Deri volume
A21: Yep of course. But it’s better for others to do this. That’s the beauty of DeFi composability.
As a matter of fact, we are in talks with several DeFi teams (some of them are famous) for them to develop structural products that hold futures and options. Please stay tuned for this.
Q22: Is WOO network a pure investor, or there will be futures between the protocols?
A22: You might guess!
WOOTrade is never a VC. I don’t think they ever do pure financial investment.
We are discussing a lot regarding how they can trade on Deri.
(In case some of you don’t know this yet, WooTrade is THE №1 market maker and trader on DYDX.)
Q23: Hi deri I have experience with app. First thing i see is slow loading is not smooth the chart doesn't show time frame to choose from like Binance and technical indicators do you plan to fix it?
A23: The slow loading issue in the other day should have been fixed already. It’s good on my end now. Please let us (@archus & @dev_deri at telegram) know if it is slow on your end.
As for the UI, we are revamping our website. You guys will see something new in a month.
Q24: Can someone explain why deri protocol is considered DeFi2.0? is it because its related to options that no defi out there have done yet?
A24: As far as I know there is no widely-accepted definition of DeFi 2.0 yet😂
But if there were, I think it should be related to your point: Advanced or sophisticated DeFi apps should be in the core of DeFi 2.0, which means DeFi 2.0 should not just tackle the simple problems like spot exchange or borrow&lending. There is no doubt that derivatives should be in the core of the next chapter of DeFi.
Q25: Hi. What are the best places to learn about Deri?
A25: Please refer to our docs site and our whitepapers:
https://docs.deri.finance/
https://docs.deri.finance/whitepaper
Q26: Guess this would have already been asked. Can you please advise by when can we expect a real time graphical representation of figures of how many tokens bought and burn ? This would provide transparency and boost confidence among the investors?
A26: The number of tokens bought and burn is among the many live metrics that we want to make real-time available on our info site (https://info.deri.finance/). We kept adding things to this site. Please give us some time. We are working on this.
Q27: Hi, guys. Could we see the structure of APR, Like how many percent of reward is from market making incomes and how many percent is from liquidity mining
A27: The APY number you see is purely for DERI reward. The market making profits are reflected in your Mining PnL (for Main Zone) or Liquidity Share Value (Inno Zone).
Q28: I have a suggestion for the buy back scheme. IMO the buy backs should be dynamic and autonomous, whenever a fee is collected, it should be immediately used to buy some Deri. Also we could raise the 20% to anything up to 100% yes?
A28: A lot of questions regarding buy&burn!
Regarding the suggestion of the timing of buy&burn, it’s addressed previously.
As for the percentage, this was asked by quite a few of you. This is not something we can change on our decision. there will be a DIP vote to decide this. This will be opened soon. If the community decided to raise the percentage of that, we will change it accordingly.
Q29: What can users do to help DERI get into the top ten?
A29: Good question. I don’t know yet. they seem to evaluate the projects based on their metrics. But let me ask them if the community can do anything on this. Will revert to you guys on this.
Q30: What is the unique advantage of deri? comparing with mcb and kine
A30: This question is too general😂
There are many differences between Deri and other projects in this sector but I am not gonna comment on the disadvantages of the others here.
One thing is easy and obvious to notice though: Deri is the only DeFi derivative solution with both futures and options.
Q31: Are there plans for a DERI perpetual option pool?
A31: I assume you were referring to an everlasting option pool with DERI as base token. We don’t have a plan for that in the near future.
(But in our V3 this issue might be naturally resolved.)
Q32: Hi is there any tutorial on options?
A32: Please refer to our docs site.
https://docs.deri.finance/
If you were talking about a video tutorial, we are looking for some tutorial video maker for this. If you know someone good at this, please refer to us.
Q33: Specifically I'd like to know whether the dev team manages its own server that is responsible to calculate vol in a particular time window and send a tx to update the volatility stored in VolatilityOracle
A33: Currently we use the vol published by Deribit. It is a compiled real-time implied vol.
Q34: hi admins, I was looking at the GitHub, what is the site for ALPHAtesting?
A34: These repos are for different purposes. (Please note not all of the repos on our github are for code management.)
But DERI fund management and DERI gamefi are for new projects indeed. These are the two repos for our bounty programs. You can find out the details from the “Issues” tab:
https://github.com/deri-finance/deri-fund-management/issues/1
https://github.com/deri-finance/deri-gamefi/issues/1
Q35: How do you calculate the available position in the option?
Theoretically, for the ETH call option, if the option price is 100 BUSD, and I have 100 BUSD in my wallet, I should be able to buy 1 option which means 1 ETH position. but now it is not. The position I can get is 0.25 ETH which is the same as the 10x future. Options shouldn’t work like this. Currently the option price has nothing to do with the position you can get, but only related to the daily fee you pay for.
A35: Our everlasting options work a bit different from the classic options. You are right that it trades a bit like the futures.
But this is not correct: “Currently the option price has nothing to do with the position you can get, but only related to the daily fee you pay for.”
The option price is determined by the underlying price and volatility (and people’s trading). Please refer to our whitepaper regarding the pricing of everlasting options. And the daily funding fee is then determined by the price (that is how everlasting options work).
https://github.com/deri-finance/whitepaper/blob/master/deri_everlasting_options_whitepaper.pdf
(We are certain this option mechanism theoretically makes sense and practically works. It’s confirmed by some of the most professional option traders in this field, including our investors that are pro option traders).
Q36: Are we gonna have the same treatment? https://twitter.com/BinanceChain/status/1451175387740848138?s=20
A36: Please stay tuned.
Q37: Did biannace invest in deri? Why does mcdex advertise like this?Mcsex said he had received a $1 billion investment from binance
A37: For the first question, you might want to rely on public news, instead of my answer here during AMA.
For the second question, that’s out of the scope of Deri AMA.
Q38: Sir, there seems would be a new kind of derivatives in Q4, what it will be？
A38: Were you referring to new kinds of derivatives or new version of Deri. For the former, I am not sure. That depends on whether we find interesting and practical derivative types to implement. For the latter, yes, it’s possible Deri V3 will be rolled out by the end of this year.
Q39: Hi 0xALPHA , I was wondering if we can have a very rough estimation on fees collected on a 100 mil traded volume.
A39: That can be checked out on the smart contract.
Q40: I remember you said that the team is looking into Solana, have you guys freeze the solana bridging or is still an ongoing thing
A40: On the Solana thread, it’s still an on-going thing.
Q41: Which tikers deri supports?
A41: Currently BTCUSD/ETHUSD/BNBUSD are traded in Main Zone. And many more are trading on Inno Zone. please check it out on the trading interface.
Q42: Why not disclose the amount of investment institutions?
A42: Some of them are subject to NDA terms in the SAFT.
Q43: Are the new investor just financial investors or do they support the team with their experience and insights as well?
A43: Most of the new investors were not VC, which means they were not just doing financial investments. what they will do is beyond just “support the team with their experience and insights” (even financial investors can do that too). There will be a lot of cooperations bwteen Deri and them, in the business level.
Q44: Every people compare deri and dydx, what do u think about it?
A44: My opinion is that there are really 3 subsectors in the Crypto Derivative business:
1. centralized exchanges: e.g. Binance Futures, Bitmex
2. half-centralized exchanges: dydx, which behaves very much alike to the 1st category but with some layer2 technology adopted.
3. real DeFi derivatives: e.g. Deri protocol
I think in long run the 3rd type will have more advantages over the 2nd as it is more crypto native and more organically built into the DeFi ecosystem.
(please note that for dydx there is no composability at all, which I think is the soul of DeFi.)
Q45: Will deri list on kucoin or biannace
A45: That is beyond what I can answer😄
Q46: Is the repurchase work about to begin
A46: Yes, I think so. I would not use the term “repurchase” tho, which is kind of misleading for this scenario.
Q47: Any chance of reducing weekly inflation for less performing products?
Reserve more DERI for trade to earn competitions seems to be better in term of growth n tractions.
A47: We constantly review that and rebalance the allocations of Deri mining among the pools. And the purpose is exactly what you said: “Reserve more DERI for trade to earn competitions”.
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.
