What Makes OptionPanda the №1 Option DEX: Scalability and Professionalism
OptionPanda is a DeFi option exchange underwriting and trading short-term European options. I consider OptionPanda as the №1 option DEX because it satisfies both human nature and the necessary need in the market, and thus it is a market must-have.
Option trading on OptionPanda is very simple. It provides European options with expiry durations of 5, 15, 30, 45, and 60 minutes, and automatically exercises expiring options. The difference between the settlement price and the strike price (the “intrinsic value”) minus the premium is the user’s profit. But please be noted that if the calculated difference is negative, the intrinsic value is zero.
The whole process is like a guessing game. After users logs in their wallets, all they need to do is to guess the market trend and place a bet.
It is easy, fast, and thrilling, not only suitable for investors with high-risk appetite, but also for thrill-seeking ordinary investors. The tokenomics of OptionPanda is based on human nature. After all, the financial market is a game of human nature, and a successful product should be designed to satisfy those natures. All those reflect the team’s insight and operation capacity, and for investors, it is the team capacity that they value the most.
The above is OptionPanda’s entertainment nature, and what makes it so scalable.
OptionPanda is also a very professional project.
There are indeed projects similar to OptionPanda such as Hegic, but OptionPanda is more suitable for the blockchain market. Hegic provides relatively longer-term European options with expiry duration ranging from one to four weeks. The blockchain market is extremely liquid yet with small size, and thus more vulnerable to the financial environment. Therefore, the hedging effect of long-term European options is very limited and is more suitable for large institutions.
OptionPanda, on the other hand, is made for the blockchain market. No matter you are a professional trader or an ordinary user, short-term European options can amplify your profit, without the margin-call risk of futures contracts.
OptionPanda’s professionalism is also reflected in the details of its tokenomics. Take the AMM fund pool for instance, which is used to solve the liquidity problem of Defi derivatives. OptionPanda has set up a call/put underwriting pool to increase the utilization rate of funds. To avoid concentration and liquidity risk of the underwriting pool and protect the market maker, OptionPanda evenly allocates the pool’s available funds across options with different expiry dates and sets up a utilization ratio upper bound for the pool. All those demonstrate OptionPanda’s in-depth understanding of Defi and option products.
The pricing of options also shows the professionalism of OptionPanda. It follows the Black-Scholes formula, which is widely used by mainstream European options, but has made some user-friendly adjustments to the Sigma (the “implied” volatility), which is called the Dynamic Sigma Adjustment, to protect the interests of both sellers and buyers.
On OptionPanda, if more than 90% of options generated within a certain time-frame are sold, that’s an indication of high-risk appetite or market heating up. Then at the subsequent auction event, Sigma will be adjusted upward by 5% to cool down the market; If no more than 50% of options within a certain time frame are sold, that’s an indicator of low-risk appetite or market cooling down. Then at the subsequent auction event, Sigma will be adjusted downward by 5% to stimulate the market. This kind of dynamic adjustment works wonderfully.
OptionPanda is a combination of scalability and professionalism. It sees through the financial market and understands the gaming nature of humanity, thus satisfies the necessary need of the market. All those have demonstrated the capacity of the OptionPanda team. The future of OptionPanda is bound to be promising.