Getting rich overnight through animal tokens investment? Be careful with risks!
The blockchain market has been seeing a hype of all sorts of animal tokens in recent days. Doge, Shib, Akita, Pig and other newly released tokens at extremely low price but with extremely high supply are traded in large volumes. Their prices have also increased astonishingly. Even veteran investors are stupefied to see this frenzy. ETH, despite its constant increase, is nonetheless eclipsed by their drastic growth.
But the capital market is always cruel and even more so when it comes to speculation investments in assets with weak fundamentals, such as dogecoin and Akita. Despite the endorsement by Elon Musk, Dogecoin has experienced a rapid decline of 30% today. Prices of Shibcoin and Akitacoin also dropped rapidly. Stories of making 100 or even 10,000 times of revenues either result from survivorship bias or are merely a marketing strategy. What is not seen is speculators who have suffered considerable losses.
Often, these tokens are unlikely to climb back to their record high prices. It is no joke but reality when some one says “it has increased over 100 times but I just got my investment principal covered”.
Both Akitacoin and PIGcoin have rapidly declined; SHIB is facing strong pressure to sell off.
Undoubtedly, what speculators is concerned with the most is how to make more money and avoid losses in this sudden dramatic decline. Therefore, it is very critical to hedge risks with instruments such as options.
Take OptionPanda, a DeFi options protocol, for example. Investors can use the option transaction services offered by OptionPanda to buy options with corresponding tokens to lock in profits and avoid unknown risks. For example, users can buy Dogecoin on OptionPanda and then sell options, which enables investors to sell Dogecoin at a higher price and thereby guarantees their profits in case of a big drop of Dogecoin like today.
Due to its global scale and the 7X24 non-stop trading, the blockchain is subject to more volatile market changes. To counter such fierce risks requires fast and flexible crypto options. OptionPanda has designed unique option products to satisfy such demand by offering short-term European-style options within expiration time ranging from 15 to 60 minutes. The options are automatically exercised, making it a suitable risk hedging tool for high-risk tokens such as Dogecoin, Akita and Shib.
At OptionPanda, users can buy options to hedge against possible declines when they notice signals of a change in the market. To ensure successful purchase of options, OptionPanda not only uses AMM option underwriting pools to address liquidity issues but also adopts a variety of protection machanisms and lucrative incentives to encourage market making.
Although OptionPanda is currently in beta and is unlikely to list these animal tokens at its initial stage, as a community-driven option platform, it encourages and welcomes OPA holders to expand token types and thereby provide protection for more assets through governance.
The decentralized and open nature of the blockchain has brought abundant opportunities and innovations to the market. These opportunities, however, may turn into crises if risks are not well controlled. There are various investment targets and risks will always exist. But as an excellent risk hedging tool, options empowers us to counter these risks. To invest in options, each individual should master how to give full play to the advantages of options.