I know there’s hesitation to add XRP at this time because of the low liquidity in the pools, but it’s my opinion that it’s irrelevant which coin options are consuming the current liquidity, and more importantly I believe having XRP options would draw a lot of attention from the very large XRP user base to FinNexus. FinNexus would be the first decentralized options platform to support XRP, and that should bring considerable interest towards investing in FinNexus via FNX, and of course that would all get staked into the pools. So rather than waiting for liquidity to support XRP, let’s try XRP bringing liquidity to the pools.
P.S. this only makes sense after the audit completes
Maybe Flare, i think that xrp don’t run in contracts
It doesn’t need to. All that’s needed is an XRP price feed from Link
I totally agree on that. Be the first plateform to propose options on XRP would bring a lot of attention about Finnexus in the large XRP community and would be a first mover advantage.
I agree on adding new underlying assets.
But the delima right now is not lacking option buyers. The problem lies in the fact that we have a small pool now. BTC and ETH are now having the biggest options market, still with greater future potential.
It is more than enough to occupy the pool for now.
Actually, the pool size is the biggest problem for trading options, because of the price risk-adjustment mechanism, similar as the price slippage. It will block the traders away.
The most important thing now is to increase the TVL in the protocol.
I suggest that we can have more flexibility, when we have a bigger pool.
Plus, XRP is not very DeFi at present.
I would think supporting XRP would increase the pool size because speculators would see the value of supporting XRP. Does it matter if XRP support comes before pool size? What harm is there?
Also, please explain how XRP is any less DeFi than Bitcoin or Ethereum?
It’s like the chicken egg problem
Attract attention from XRP community could also help to increase the TVL. But yeah I understand your point.
By the way, look at what Ripple just published yesterday:
Derivatives is the next big thing in crypto market for sure.
XRP options would help a lot with increasing TVL. I think having XRP options will introduce a lot of new users to the protocol and help assist the other pools. It could be damaging to wait for the pools to fill up before exploring other assets. TVL is TVL whether XRP or WAN BTC ETH etc.
Well including XRP as underlying assets of options does not directly lead to an increase in the TVL. The TVL is full of USDC now, from users of selling options and get premiums, not the ones buying options.
I have to believe there’s a synergistic relationship between supporting XRP options and increasing the TVL based on the increased interest in the product from the exposure it would receive from the XRP investors
Though I do understand your hesitation if it’s from the perspective of trying to make the best first impression
From the technical level, we checked that the major decentralized oracle firms like Chainlink and Band have XRP feeds already. The problem is the IV, because there is nowhere to get it from the market, even from CEXes. If we launched the XRP options, we have to use the historicial volatility as IV for now.
Ah, interesting side-effect of the pools. Where do you get IV for BTC and ETH?
Thought maybe this could help?
“For example, implied volatility (IV) is an output from the most popular option pricing method – the Black Scholes equation. However, Hegic’s approach to pricing options renders IV an input in pricing rather than an output.”
It is an interesting idea. It would make sense to have XRP options. It could bring good attention and interest from XRP community. Also, this would be the first decentralized XRP options.
The IVs are fed from Deribit. We explained it in the docs here
" 4. Moving Average IV and the IV Surface Mapping"
Great idea. I have some questions. XRP options on Ethereum. Do you think XRP holders will buy it on Ethereum? Do you think XRP holders have strong need to buy options. What is users case?
Hedging risk. Research straddling strategies. This would be incredibly useful for XRP owners and would be very popular
XRP people will not participate in DeFi. That’s my concern.