Instant $500k Profits on BZRX Raises Questions on DEX Offerings

Also, no one is shorting COMP, and The Infinite Machine launch!

Hello Defiers! Here’s what’s going on in DeFi

  • BZRX token sale sparks debate on open versus fair

  • COMP bears are hibernating

  • and a bunch of book stuff :)

🌈🌈: Countdown is Over! The Infinite Machine Launches Today!

Join the virtual event hosted by The Strand bookstore, where I’ll be discussing the book with Chris Burniske tomorrow Wed. July 15 at 7pm EST.


🙌 Together with Status, a secure messaging app, crypto wallet, and Web3 browser, Kyber Network, the on-chain liquidity protocol for the tokenized world, and Keycard, the secure, contactless hardwallet & open source API.


In DEX Offerings, Open Doesn’t Mean Fair

By Cooper Turley

bZx’s token listing is raising questions on the latest fundraising mechanism on Ethereum. 

Lending platform bZx listed its BZRX tokens, and like other Etehruem projects, it did so via the fan-favprite decentralized exchange Uniswap, adding to a wave of so-called Initial DEX Offerings, or IDOs. The bZx team seeded the listing with $500k in capital and included a bridge for presale investors to claim liquid BZRX tokens.

Different Animal

IDOs on Uniswap are unlike ICOs where investors sent funds directly into teams’ wallets at predetermined price bands, as an automated pricing model means the token price can start climbing as soon as the sale starts. Also, the liquidity pool at the core of DEXs like Uniswap, means that traders can instantly cash out. 

DEX offerings are also different from listings on centralized exchanges, such as Binance, as anyone is able to list their tokens on the open Uniswap platform. In theory, just as IDOs allow anyone to list tokens, they also allow anyone to buy them. In practice though, it doesn’t always work out that way.

12x Jump

Less than 60 seconds after the Uniswap liquidity pool was seeded, BZRX price jumped 12x from it’s listing price of 0.0002 ETH to 0.0024 ETH. You’d think this was a sure win for early investors. However, when looking under the hood of what happened, the main “winners” were those running scripts to purchase BZRX in the same block it became available. 

The very first purchase of 650ETH was completed in the same block liquidity was added.

“At block 10451767, the Uniswap pool is created with 1k ETH and 1M BZRX which implies $0.04 as expected,” wrote Dex.Blue co-founder Angelo Min.  “BUT in the same block, 3 addresses managed to buy ~$187k worth of BZRX driving the price to $0.15 right off the gate

Not only were the bots able to get in and scoop the tokens up early, but they may have spammed the network to prevent others from getting in, according to Roman Storm, Peppersec founder.

Less than 5 min later, when the team officially announced the Uniswap pool on Discord and Twitter, the price was already hovering at around $0.60. At that point, other traders piled in to buy the token, and the initial traders were able to sell, with one of the “snipers” making almost $500k of profits. 

BZRX has since slumped from its high of $0.6 to $0.2. 

Bots’ Advantage

The bZx team clearly communicated the token address, the listing time and made precautionary warnings about scam addresses that popped up minutes after the sale.

But there’s only so much that can be done to give less technical and experienced investors a fair chance against their automated counterparts. As highlighted by CoinFund founder Jake Brukhman following UMA’s initial listing, it’s clear small fish may get fried when using Uniswap offerings. 

The listing has sparked debate over openness versus fairness: do open protocols effectively generate an equal playing ground when technical traders can front-run less experienced participants? 

bZx said that the bot was doing nothing more than a trader buying low and selling high.

Moving forward, it’ll be interesting to see how teams prepare for pushback from DeFi users after seeing what happened when a sale didn’t work out in their favor. This certainly won’t be the last IDO, and it’s clear other protocols - like Mesa - are putting their hat in the ring to start the discussion on a more fair distribution model.


No One Is Shorting COMP in DeFi

By Rachel Rose O’Leary

Compound Finance’s COMP token is currently trading at $160 —up about 10x its listing price and with a market cap of $1.6 billion, it’s DeFi’s most valuable token.

While COMP’s surge may prompt speculation that it’s rallied too far, the reality is that there are no signs of anyone shorting the token that spurred the yield farming craze in decentralized platforms.

Zero Volume

yCOMP-AUG20, an ERC-20 token expiring August 20 that allows holders to short COMP, has had zero trading volume in the past 4 days, compared with 708 ETH ($170,000) on June 25, when it launched. The token, which was created by synthetic assets issuing and trading platform UMA Protocol, was widely heralded as a mark of DeFi’s growing maturity when it launched.

After high volume on the day of its launch, trading has dried out, with an average of 2.7 ETH ($644 daily) exchanging hands daily.

Holders and Sponsors

To short COMP using UMA’s method, users can either hold yCOMP or become a sponsor. As a sponsor, users can mint yCOMP with Dai as collateral before selling it on Uniswap. As the price of COMP falls, that collateral can be unlocked for cheaper than the price the yCOMP was sold for.

A total of 8 sponsors have engaged with the short method since launch, while the number of distinct addresses that bought yCOMP is 31. 

No Borrowing

Prior to the launch of yCOMP, COMP was difficult to short in DeFi. Borrowing COMP, the basis of short selling, isn’t currently supported by any major platform, which led the UMA protocol to release a token to automate the short-selling process.

According to UMA co-founder Hart Lambur, in this way, yCOMP was successful. But there are many reasons for its low usage.

For one, at the time of launch UMA protocol lacked a front end interface to mint the token. To short COMP, yCOMP users would have to mint the token manually- making it hard for non-technical users to engage with.

A front end has now been built by community members which may in time increase the token’s traction.

Fairly Priced 

yCOMP trades at a slightly cheaper price to COMP token itself, giving its holders a discount: what UMA calls the yCOMP yield. While annually, this yield was up to 350% at the day of launch, it has now dropped to 225%.

According to Lambur, this is another indicator that the market has stabilized.

“You could interpret this as saying that the market thinks COMP is "fairly priced,” Lambur said.

COMP Put Options

While yCOMP failed to gain traction, COMP options show comparatively high activity, signaling that while there’s no demand to profit from the decline of COMP, holders are seeking to protect against the token’s volatility.

On June 26, DeFi options trading platform Opyn launched a COMP put option, which allowed users to sell COMP if for $150 it reached that price or lower before June 03. 

The option is now closed, but had daily volume highs of $425,000. A total of 2714 put options were bought.

On July 10, Opyn launched a second COMP put option, allowing holders to sell COMP for $150 before August 07. So far, 20unique addresses have bought this contract, which is currently selling for $8.70

Bears in CeFi

While DeFi traders aren’t using UMA’s synthetic token to short COMP, some traders are using CeFi platforms are betting against Compound Finance’s token. But they’re not lining up to short the token either.

Margin trading platform FTX offers the ability to short COMP by 3x, meaning if the price of the token drops, traders profit by three times the size of the drop. FTX’s COMPBEAR token has had only $8k of trading volume in the past 24hrs, that’s lower than most tokens on the exchange, with LINKBEAR volume at 100x higher and DOGEBEAR at 10x higher.

Still, others are betting against COMP in a more straightforward way: selling the token. COMP has slumped more than 50% since highs of $373 on June 21. Just yesterday it dropped 7.5%.


🚀Book Stuff! The Infinite Machine Launches Today

My book on the history of Ethereum, The Infinite Machine, is out today! It’s the culmination of more than two years of work, following the Ethereum crowd around the world, and hundreds of hours of interviews; I couldn’t be more excited! I’m so happy I was able to tell this fascinating story, and really hope you enjoy it too. Here are a few articles and podcasts on the book out today:

Five Years On, Ethereum Really Is the ‘Minecraft of Crypto-Finance’

I wrote an opinion piece for CoinDesk for Ethereum’s five year anniversary, stating that the network is achieving everything it set out to do.

The incredible story of Ethereum, “The Infinite Machine”

Decrypt reviews The Infinite Machine, comparing it to Nathaniel Popper’s Digital Gold and saying I “straddled the tightrope of meticulous technical fact (…) interlaced with salacious detail worthy of a Hollywood biopic.”

Hidden Forced Podcast: The Rise of Ethereum the Future of DeFi, and the Transformation of Crypto Media

“In Episode 145 of Hidden Forces, Demetri Kofinas speaks with Camila Russo, the host of the Defiant podcast and author of “The Infinite Machine,” the first official account of the rise of the Ethereum blockchain.”

Keen On Podcast: Camila Russo on Ethereum and the Future of the Internet

“The coronavirus pandemic is dramatically disrupting not only our daily lives but society itself. This show features conversations with some of the world’s leading thinkers and writers about the deeper economic, political, and technological consequences of the pandemic. It’s our new daily podcast trying to make longterm sense out of the chaos of today’s global crisis.”

Lit Hub’s Most Anticipated Book of 2020

The Infinite Machine made this list! “Don’t let the techno-verbosity of her title mislead you, however. Russo—the ex-Bloomberg tech journalist who describes herself on Twitter as “Chieftess at the Defiant”—has written a fast-paced, Michael Lewis-style history of crypto-currency which help us sort out our Bitcoins from our Ethereums.”


Don’t like touting my own tweets, but I did break news with this one: ERC20 market capitalization surpassed ETH’s market cap for the first time.


Hope you’re enjoying The Defiant. If you are, spread the word!

Share The Defiant


The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money.

About the founder: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

Recap: DeFi Week of July 6 🦄

Hello Defiers, hope you’re having a great weekend :)

Summing up last week: Yield farming is producing unintended consequences as demand for Dai as a way to access governance tokens, is causing it to trade above $1, while Compound Finance users are borrowing from their own supply. But that’s not stopping DeFi platforms any time soon and mStable and bZx announced their token distributions, while users flooded Kyber network to get their hands on KNC. Binance listed SNX was more evidence of demand for DeFi tokens, and CENTRE blacklisting an Ethereum address holding $100k of USDC proved decentralization purists right. Anonymous DeFi builder Molly Wintermute said she’s pushing ahead with Hegic after releasing a first version of the platform with a bug in the code. OMG Network’s Vansa Chatikavanij talked Ethereum scaling and why value transfer is a basic human need.

That was just one week. Subscribe to get the latest DeFi news and analysis straight to your inbox and you don’t miss a thing. Free-signups get partial content, paid subscribers (only $10/month, $100/year) get everything. Click here to pay with DAI ($70/year).

🌈🌈: Also: We’re Only 3 Days Away From The Infinite Machine launch!

Pre-Order my book on the history of Ethereum and I’ll send you a personalized Proof of Pre-Order NFT. Click here for how to get a POP.

Join the virtual event hosted by The Strand bookstore, where I’ll be discussing the book with Chris Burniske this Wed. July 15 at 7pm EST.


🙌 Together with Status, a secure messaging app, crypto wallet, and Web3 browser, Kyber Network, the on-chain liquidity protocol for the tokenized world, and Keycard, the secure, contactless hardwallet & open source API.


Interview

"Basic Financial Services is a 21st-Century Fundamental Human Need:" OMG Network's Vansa Chatikavanij

This week’s interview is with Vansa Chatikavanij , the CEO of OMG Network. The Bangkok-based project formerly known as OmiseGo has spearheaded research and work on a scaling technology for Ethereum called Plasma. Scaling solutions will be key for Ethereum and therefore DeFi,  to continue growing. The network is already at capacity, and gas prices are getting prohibitively high, especially for complex DeFi transactions. 

🎙Listen to the interview in this week’s podcast episode here:


Molly Wintermute: "I'm Paying a High Price for the Mainnet-First Approach to Building"

Molly Wintermute is an anonymous DeFi builder who released a decentralized options trading platform on April 23, only to discover a bug in the code hours later. Nearly $48k of users’ funds are now forever locked in the project’s smart contracts, which Wintermute has refunded thanks to support from early contributors. Wintermute launched a new version of Hegic in early May, and did so without an audit. The audit did come though, a month later, and the platform has so far been running unscathed, though value locked at almost $40k is still below pre-hack days (or pre-hack hours, rather).

Thursday

Dives

  • Blocked USDC Proves Decentralization Purists Right: This is exactly what decentralization advocates warn about: CENTRE, the issuer of USDC, has blacklisted an Ethereum address holding $100k of the tokens.

  • DeFi Traders Flood Kyber Network After Revamp: Almost $20M worth of $KNC has flooded into Kyber Network after the decentralized exchange’s revamp, signaling demand for DeFi tokens is still surging.

Bytes

Tuesday

Dives

  • Unintended Consequences of Yield Farming: What started out as a way to drive users to DeFi platforms, has quickly turned into a race that’s focused on snapping up tokens. This is causing parts of DeFi to crack.

Bytes

  • Aave Brings Undercollateralized Loans to DeFi: Aave, the third-largest lending protocol behind Compound and Maker, will allow liquidity providers to delegate their borrowing power to other users.

  • bZx to Distribute its BZRX Token Next Week: DeFi lending protocol bZx is set to distribute its BZRX token on July 13th at 10am EST as a part of a wider re-launch. 

  • For-Profit DAO Makes Second Investment: VentureDAO, a product of the MetaCartel group, announced its second investment is into Zapper, an interface that makes DeFi easy and simple to use.

  • Arweave's Announces $100,000 Incubator: Data storage blockchain protocol Arweave las week announced its Open Web Incubator is live.


💜Community Love💜

Thanking all the amazing Defiers for the support and love this week (and always)!

Eric Juta @ericjuta
@0mllwntrmt3 I want those $CHADHEGIC tokens This @HegicOptions interview's dope Also read
medium.com/@molly.winterm…

The Defiant @DefiantNews

Molly Wintermute found a bug in @HegicOptions hours after launch but she has been pushing forward since. Here's her views on audits $HEGIC plans Vol so far & DeFi "We will build our own way, without any one's permission." @0mllwntrmt3 https://t.co/KAs6tOozfM

The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

Click here to pay with DAI. There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the founder: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

Molly Wintermute: "I'm paying a high price for the mainnet-first approach to building"

The anonymous DeFi hacker who found a bug in her options trading platform hours after releasing it is pushing forward with her project.

Hello Defiers! Today I’m sharing an interview that can serve as a cautionary tale for builders and investors in the space. It also shines a light into a controversial DeFi character, who isn’t afraid of voicing her strong opinions, even if they rub people the wrong way (which they often do).

Molly Wintermute is an anonymous DeFi builder who released a decentralized options trading platform on April 23, only to discover a bug in the code hours later. Nearly $48k of users’ funds are now forever locked in the project’s smart contracts, which Wintermute has refunded thanks to support from early contributors. Wintermute launched a new version of Hegic in early May, and did so without an audit. The audit did come though, a month later, and the platform has so far been running unscathed, though value locked at almost $40k is still below pre-hack days (or pre-hack hours, rather).

Molly Wintermute’s avatar. Image source: Twitter

She has a simple recommendation for those who are still wary about Hegic: “Don’t use it.” Still, Wintermute is quick to point out the juicy returns Hegic traders are making, and says others will also want to taste some “DeFi raw meat.” Wintermute also talks about the next big milestone she’s focused on; HEGIC tokens, which she promises will have a “chad” distribution.

The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for 70 Dai/yr vs $100/yr).

🌈🌈: Also: We’re Only 1 week away from The Infinite Machine launch!

Pre-Order my book on the history of Ethereum and I’ll send you a personalized Proof of Pre-Order NFT. Click here for how to get a POP.


🙌 Together with Status, a secure messaging app, crypto wallet, and Web3 browser, Kyber Network, the on-chain liquidity protocol for the tokenized world, and Keycard, the secure, contactless hardwallet & open source API.


1. Understanding your anonymity, what can you mention about your background? Is Hegic the first dapp you built? Have you been in crypto for a while?

My birthday is January 29, 2020 because it’s the day when I’ve made my first tweet about Hegic: “I’ve been working on something that I call Hegic. I hope to reveal my creature ASAP”. That’s why the only fact about my background is developing Hegic. I am not a fan of putting labels on people. Some people call it “social capital” or “reputation systems”. Well, I’m a person with no social capital or reputation in the crypto and DeFi spaces and I’m building the Hegic protocol from scratch. The crypto community can only judge me by what they can see by themselves in my code that is open sourced on GitHub, on the interfaces of Hegic website or by reading the community members’ comments.

I’m a person with no social capital or reputation in the crypto and DeFi spaces and I’m building the Hegic protocol from scratch. The crypto community can only judge me by what they can see by themselves in my code.

It’s such a nonsense when I hear some people proudly say: “I’ve bought my first Bitcoin in 2011” or “I’ve heard about Ethereum in 2015”. Does this information have anything to do with this particular person’s credibility or skills? “Okay, you’ve also learned about the Internet in 1995, but why aren’t you one of the creators of Google, Twitter, Uber, Wikipedia or Bitcoin?” My humble assumption is that it doesn’t matter much for how many years has someone been in the space. The renaissance of crypto comes when devs are starting to build and deliver new protocols and products that people want instead of just writing tweet storms or discussing fancy ideas and concepts on podcasts for years.

2. Were any user funds lost because of the bug found in the previous version of Hegic?

I’ve released the Hegic protocol on February 20, 2020. The idea behind Hegic is to abstract all the complexities behind options as a financial instrument and to help people use it in a simple way on a daily basis.

DeFi users can use options for speculation (you can think of options as a x10 leverage with a fixed possible maximum loss — no more margin calls and liquidations), value protection (hedging assets from the price downside) and more. I’ve introduced a concept of a hedge contract in the Hegic whitepaper (it’s pretty outdated already; I’ll fix it in the nearest future and rewrite the whitepaper). Hedge contract is a system of Ethereum contracts that accumulate and hold liquidity in a non-custodial way, write (sell) options contracts to the holders, accumulate and distribute premiums between the liquidity providers (writers) and conduct on-chain settlement of the contracts.

During the first two months Hegic only had at-the-money ETH put options. It means that users could only pay for a right to swap their ETH for DAI stablecoins at a fixed price during a certain period. For example, if they held an option and the price of ETH was declining, they could click one button on the interface and swap 1 ETH for 200 DAI when the market price of ETH was $150 per ETH. The Hegic protocol’s pre-v1.0 traction is open and transparent for everyone who wants to learn how it all started.

When I’ve tested my initial assumptions about the protocol’s value for the users, I’ve started to work on v1.0 of the protocol. After the v1.0 mainnet launch I’ve found a bug in my code. In v1.0 each time a holder bought an option, they were paying for a right to buy or to sell ETH at a fixed price during a certain period. When an option contract expires worthless (without exercising by a holder), someone needs to unlock these funds using the unlock function. Exactly this function was broken in my code. I’ve published a post-mortem article and apologized for calling it a typo, not a bug.

$47,765 have been forever locked on the contracts. I’ve reimbursed 100% of the funds lost to those who have been affected by the bug in my code. It was possible thanks to a number of early contributors who have supported me in my endeavours with Hegic. I even think that many of them are fans of The Defiant. That's why I want to thank all of these people and funds who have helped me to keep the protocol alive. I’m not going to disclose their names here because we value each other’s privacy and respect our rights to build, contribute and add value to the ecosystem pseudonymously.

$47,765 have been forever locked on the contracts. I’ve reimbursed 100% of the funds lost to those who have been affected by the bug in my code.

3. After finding a bug in your code in your first version, why did you decide to relaunch Hegic without an Audit?

You can read the post-mortem article that I’ve wrote to share my thoughts about the real process of working with auditors that I’ve experienced. They can tell you that a three-days security audit will provide a good coverage even after you asked if this could even be possible and on the next day they will publicly say that it wasn’t a “real” audit. But it’s only my personal experience. Before launching v1.1 in June, I’ve finally decided to hire another audit firm and they have audited the code of v1.1.

In my personal opinion (and I’m pretty sure that 999 of 1000 people reading this part won’t agree with me), one protocol built and shipped in mainnet is worth a thousand projects whose creators are developing them for years and playing with new approaches that they find while attending different hackathons. Warning: I’m paying a high price for the mainnet-first approach of building the protocol.

One protocol built and shipped in mainnet is worth a thousand projects whose creators are developing them for years and playing with new approaches that they find while attending different hackathons. Warning: I’m paying a high price for the mainnet-first approach of building the protocol.

I also believe that people who are using all of the new DeFi protocols and products (excluding OGs like Maker, Compound, Synthetix and a few others) are ready for tasting some raw mainnet meat. I mean, thousands of people are looking for alpha in DeFi on a daily basis, tens of thousands are looking for high returns in crypto in general. The greatest opportunities are always far away from the herd’s current attention (pardon my language). Compare Ethereum-2016 to Ethereum-2020. I know one guy whose name is Olaf (and you might know him as well) who has tasted this raw Ethereum meat in 2016 and understood all the possibilities of this raw meat to be well-cooked in the future.

People who are using all of the new DeFi protocols and products (excluding OGs like Maker, Compound, Synthetix and a few others) are ready for tasting some raw mainnet meat.

4. What would you tell users who are unsure of whether to use Hegic?

Don’t use it. The risk/reward ratio of using the Hegic protocol today won’t suit many people yet. Fun fact: ETH pool liquidity providers’ returns on Hegic in June were +25.09% APY in ETH. Sounds sweet, but if you wanted these returns to appear, you had to deposit your funds on the contracts of the protocol that had just been released.

I’ve refocused my development approach from speed to quality and Hegic becomes better and better. I’ve fixed the bugs and the deployed v1.1 contracts were live in mainnet for one month. So if someone is unsure, she shouldn’t play with Hegic today. Just observe, learn and enviously monitor other people’s high returns from trading options on Hegic (just kidding).

If someone is unsure, she shouldn’t play with Hegic today. Just observe, learn and enviously monitor other people’s high returns from trading options on Hegic (just kidding).

5. How much volume and notional value does the platform have?

These are the numbers that I’ve recently published in the Hegic June 2020 Community Report

• 220.24 ETH trading volume
• 164.82 ETH traded in call options
• 55.42 ETH traded in put options

• 40 options contracts traded
• 12 contracts are active
• 9 contracts have been exercised
• 19 contracts have expired

• $39,145 Total Value Locked
• 136.95 ETH ($31,411) TVL in ETH Pool
• $7,734 TVL in DAI pool
• 78.04% (max. 80%) DAI pool current utilization rate
• 79.66% (max. 80%) ETH pool current utilization rate

Liquidity providers’ returns in June are: +25.09% APY in ETH and +19.20% APY in DAI.

6. What are the major milestones you're working on?

The Hegic protocol already generates settlement fees (read: money). V1.1 version of the protocol has a fixed fee model: 1% of every option’s amount is accumulated and distributed among the token holders. These fees are currently distributed manually among the early contributors of Hegic who have acquired HEGIC tokens when almost nobody in the universe has ever heard about the protocol.

I’m currently working on finalizing the token mechanics design of the protocol for scaling the settlement fees distribution process as well as making it possible for practically anyone to partially own the protocol while holding HEGIC tokens. The HEGIC token holders will be able to earn settlement fees through staking their tokens on the staking contract. One more important thing is that options buyers and liquidity providers will be rewarded in HEGIC tokens for their activity in the protocol. But it’s not so easy as it seems. The HEGIC tokens distribution mechanism will be x100 better and a pretty “chad”-one, much better than what we usually see in 99 of 100 new “virgin” tokens: “hEy gUyS VCs oWn 90% of tOkEnS sO plz BuY z oThEr 10% tHaT aRe LeFt TankYoU vErY Muh!” Stay tuned and wait patiently for the HEGIC token specs to be released soon!

The HEGIC tokens distribution mechanism will be x100 better and a pretty “chad” one, much better than what we usually see in 99 of 100 new “virgin” tokens: “hEy gUyS VCs oWn 90% of tOkEnS sO plz BuY z oThEr 10% tHaT aRe LeFt TankYoU vErY Muh!”

7. In what ways are you different from Opyn?

I don’t know. I’m not following any other projects. I think that if someone builds a DeFi protocol and simultaneously tries to keep up with all the things that are happening around, she does one of the two activities wrong. One of the latest articles that one of the community members has shared with me is “A Comparison of Decentralized Options Platforms” by Ryan Tian and Nicolas Krapels. Maybe this article could be a good starting point for those people who eager to learn more about different projects that are working on building the options infrastructure in the DeFi space.

8. In what ways can options in DeFi work differently/better than options in traditional finance?

Firstly, users will become the owners. They won’t be just silently paying fees to centralized exchanges for trading options but will be earning fees together as the protocol’s token holders and participants.

Secondly, liquidity pools will be protecting the writers (sellers) of options from big losses and will be automatically and effectively diversify their capital among thousands of options contracts at once. I call it diversification by design and I’ve described this principle in the article: Build DeFirent: Three Hypotheses of Hegic Protocol or How To Improve Long-Term ROI in Options Writing.

Thirdly, these will be mobile-first products with a global outreach. No more Monday to Friday trading B.S. No more office hours. No more managers (sorry, DeFi Karen!). We will build it in our own way. We will be using it without any other party’s permission. We will scale it globally and prosper together. Vive la révolution!

P.S. Read The Decade of Financial Orgy Manifesto and start budling in DeFi today.

We will build it in our own way. We will be using it without any other party’s permission. We will scale it globally and prosper together.


Hope you’re enjoying The Defiant. If you are, spread the word!

Share The Defiant


The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the founder: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

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