Avalanche Summit 2022 - Derivatives - The Big Picture
Speaker(s):
Christine Lee,
Anand Gomes (not present),
Darius Sit,
Joshua Lim
Held on:
21-03-2022
Written on:
21-03-2022
- products that were common in tradfi, but absent in crypto.
- non-linear (complex) products - mainly options.
- brought options to Decentralized Finance
- Selling calls/puts - 100mil TVL
- exploring how to use collateral more efficiently
- Focused on decentralization, going multichain
- How decentralized are you?
- if things goes down, users can always interact with the smart contract (unlike DyDx)
- How are you dealing with regulations?
- Going with the flow, dealing with regulators as they come
- based in Singapore (for now lol)
- Coming to Avalanche
- solving liquidity for institutions - institutions are looking for trade more complicated structures
- Single point of access for institutions for multiple institutions
- Sees themselves as the bridge between centralized entities and Decentralized Exchanges
- Generally already heavily regulated
- Capital efficiency between
Decentralized Finance and exchanges needs to be improved on
- Some ideas - NFTs to represent funds
- Linear product (implying less complex)
- one of the biggest innovations in Decentralized Finance
- dependent on arbitrageurs to maintain market price across AMMs
- not scalable because of collateral, margin management
- market makers take on risk off chain, makes it more scalable
- difficult to price options using AMMs on chain
Options in Decentralized Finance
- has already grown to 1 billion TVL
- Darius Sit:
Options are more familiar to banks, tradfi, regulators so they are more inclined to know about them as (compared to
Decentralized Finance)
- thinks its the way for institutions to enter Decentralized Finance
- Darius Sit
- good way for Decentralized Finance to expand is to use yields from outside (ie non crypto?)
- trend of more people having a larger % of their networth in metamask as compared to banks
- Paradigm
- Crypto space has already been proactive about regulations, but still remains a huge vulnerability