AntiMatter team held an AMA this Friday, here is the written transcript of all questions and answers.
1) How is Antimatter different from other decentralized derivatives?
I would love to take the opportunity to walk our community through several derivative products in the market. We can learn one by one and then draw a comparison. So let’s start:
Perpetual Protocol is a decentralized perpetual contract protocol for every asset, realized by a Virtual Automated Market Maker. Perpetual protocol enables traders to trade with up to 16x leverage. It enables traders to speculate on a type of asset using another type of asset. Basically, the core is uniswap’s AMM model with adjustment.
The second one is Shield protocol: Shield is a decentralized risk-free perpetual contract built on ETH, such that traders can speculate. Unlike normal contract trading, shield uses prepaid funding fee to let trader open position. That is, the trader pre-pays certain amount of asset, which will be shown in and used as his funding fee balance. The balance will decrease each day as the platform takes funding fee. When the balance is zero, the trader either needs to closed his position or to deposit more collateral.
Next is Futureswap: Futureswap is a protocol that traders can speculate one type of crypto asset using stable coin with up to 10x leverage. The liquidity provider will earn FST(Futureswap token) as an incentive to provide liquidity. The trading rules are standard, yet to protect the platform, one needs to pay more significantly higher fees if his direction is in favor of the majority. Typically, when the long and short sides are in balance, the fee is of the trading amount.Keep in mind that futureswap is quite simple in design, but it heavily relies on oracles which are problematic.
Hegic Options allows trader to trade options based on ETH and WBTC. There is no trading fee or gas fees. The traders can hold options contracts up to 90 days. 30 minutes before options expire, they will be exercised automatically.
Now for Antimatter, We aim to decide whether a particular cryptocurrency is bullish or bearish by using a financial derivative: perpetual options. We achieve this by tokenizing perpetual options, so that investors can forge and trade these tokens. There are two token types: call token and put token, which correspond to call and put perpetual options. To understand how they work, we have a price interval that contains the current price of a certain cryptocurrency and we anticipate that the price of this currency will change within this interval. If we work with ETH and in case that the price varies within the interval, one can generate antimatter tokens(call and(or) put) by providing two types of underlying assets, such as ETH and USDT. Typically, one needs to provide more ETH to generate a call token and more USDT to generate a put token. The cost of producing tokens will vary in order to stabilize the platform. These answers are documented in our docs, but I want to point out that Although there are many models to defi derivatives, few realized that it is not sustainable and less efficient to use oracle price feed for derivatives on-chain. Also many systems with liquidation and time period are semi-decentralized because an on-chain contract doesn’t have the capacity to contain all of these.
2) What is the relationship between Antimatter and Chainswap?
Antimatter and Chainswap are two separate projects. Antimatter focus on the DeFi derivative space while Chainswap focuses on cross-chain. The two projects are found by us, but to make the development for both efficient, the team is divided into two groups to work on. We believe ChainSwap is supportive to antimatter because cross chain is very important for value transfer. The recent incidents of hacking affected us, but we did manage to solve it and we continue to build Chainswap.
I do understand that the community might have concerns that we are working on a few things and might be distracted during the development. From my experience, onchain applications are connected to each other, when you explore things in different directions, you can find more interesting technical features and gain experiences. We learned the less along the road and we become more and more efficient and productive
3) When will the call and put options for BNB be released?
So we have already deployed our option on contract on ropston. For us, we have everything onchain and don’t have. Backend, deploying on different chains are very easy. Once we finish testing and launch on ethereum, we can deploy bsc version straight away. In addition, the new version merges to secondary market with primary market, meaning we no longer need to have liquidity pool for call and put tokens, so we rely less on amms. That gives us more independence and more space to deploy faster.
We have been doing internal auditing on testnet for a week and we fixed bugs. If you are interested, please check the follow links on ropston:
In addition, from technical standpoint, if a thing is truly light weight, it should be very easy to deploy in evm chains. The core is to get it right on Ethereum mainnet first and then we will spend several days to go to most of evm chains.
4) What is the leverage equivalent to when trading perp options (ex. 3x , 10x)?
So from day one, we think it is not a good idea for people to select leverage level and then execute on-chain. There are several reasons:
- 1) if a DeFi derivative mimic the way of trading on CEX, and then let people expose to different level, i don’t think many will use DEX than CEX for leverage. Leverage is risky and there is no one to go to if there is unexpected price movement.
- 2) All successful defi protocol is actually very simple in design ( uniswap, aave), derivatives are complicated and the key is to make it less complicated for normal people, otherwise people won’t use it
- 3) this leads to antimatter design: leverage is embedded. This means you don’t Choose leverage level. When you buy the call token, you are exposed to a larger price movement. Of course you can calculate the leverage ratio from the math, but I don’t think that is the core needs for people.The leverage is dynamic for Antimatter and we will introduce antimatter calculator for users to see leverage rate at various price point
5) Now with NFT finance, how do you envision the identity of Antimatter in the future?
Firstly, I want to say that I think a good project must have a suite of products. So for Antimatter we start with perpetual options, and along the road I rebrand to the gateway for defi derivatives and financial NFTs. When we explore the math model of perpetual options, we did have some more ideas for derivatives and I want to build them gradually under antimatter so it can be the hub or lab for onchain derivatives. financial NFT is one of them. NFT right now is moving in the direction of collectibles, but there are many things can be done with financial NFTs. So it has quite a lot of potential.
And to be more simpler, this strategy gives more usage and utility to matter tokens.
6) What’s the roadmap for 2021/2022?
This one I already written down so let me copy and paste, it is quite detailed so please take some time to read:
- March 2021: Project officially starts. We designed the first version of the perpetual option math model. Start the product design of the option market.
- April 2021: Launch perpetual option testnet https://test.antimatter.finance/ and experiment with ETH call and put options within the price range of $1000 — $4000. Collect data from onchain experiments from different dimensions including arbitrage, price movement, underlying asset ratio. We identified some issues and potential for improvement. Also we get feedback from the community on the product.
- May 2021: With all the feedback from testnet v1, we start to develop a mathematical model of perpetual option V2. We also improve the product interface to make it more intuitive.
- June 2021: Start to lay out the concept of nonfungible finance and explore the combination of NFTs with derivatives.
- July 2021: Launch of https://nonfungible.finance/#/ on ETH mainnet, and update the newly product experience and UI for perpetual options.We also finished the math design of Antimatter perpetual option V2: https://antimatterdefi.medium.com/revealing-antimatter-v2-model-c7fc56e1b3a7
- August 2021: Launch of Antimatter Non-fungible NFT product — NFT based indexes can be created and traded by anyone. Conclude the internal auditing of perpetual option contract and start the external auditing through Peckshield.What is coming?
- September -November 2021: Launch of perpetual option mainnet with newly created math model. We will start with ETH perpetual options with call and put tokens. We will build a smart router through 1inch api for users to be able to buy calls and put tokens using any erc20s. Start traders program to incentivize traders Start the permissionless creation of the options for any tokens. The non-oracle math model allows more assets options to be created. Onboarding projects and market makers who have demand in hedging.Proliferating the non fungible finance and work with financial NFT projects on bringing Antimatter NFT to more usage and engage with other financial tools like lending and borrowing.
Q1 2022: We think there is still room for upgrading the mathematical model. We will keep exploring the opportunity for improvement and prepare for model V3.When the perpetual option contract stabilizes on Ethereum network and BSC, we will deploy versions to all chains that meet deployment requirements. That includes solana, Polkadot, near and layer 2s.
Q2 2022: Integration of antimatter perpetual options with lending and borrowing and asset management platforms such as compound and yearn to improve efficiency of the underlying asset usage.Start to lay out perpetual futures and start research and development of onchain non-oracle perpetual futuress.
Q3-Q4 2022: Start to build perpetual futures and explore the aggregation of perpetual options. The aggregation comes into play when people setup customized perpetual options in different ranges and we can aggregate all pools and increase the exposure range. Referral program and antimatter dao activities including making future product decisions and potentially fund ecosystem project under antimatter derivatives hub
Note that sometimes we might have delays, like we had with V2 models, so I would say we have a very detailed plan, and we are here to work hard to pursue. Also keep in mind that we will update roadmap along the road. We will innovate new things.
7) Can you compare antimatter option model to the classic option model?
This is an interesting question.
1) I think all onchain finance should have very different model from traditional models. The success of uniswap proves that.
2) the traditional model requires multiple financial parties involvement and complex price modeling. The blackshole’s model is core to traditional options
3) Onchain smart contract has limitations and technically it is impossible to mimic a traditional model onchain
4) Antimatter model is “abnormal” in the way that it had elements of both European option and American option. It is a new category of options.
5) It has self balancing mechanism and the pricing of call and put are controlled by the math model, so very different from traditional option pricing
Also there are some researches about perpetual options in traditional space but it didn’t come into place. Hopefully antimatter opens a realm for many possibilities
8) Any plans to use a l2 solution to reduce fees cost on eth like optimism or arbitrum ?
The answer is yes. Tbh, I don’t see a lot of difficulties on the technical level to move to L2, (probably many projects try to create marketing effect so they made it sounds very mysterious and huge) it is just redeployment of contract. The core is we do need to work with AMM on that. So we will deploy to L2 together with BSC when mainnet stabilizes on ethereum
12/ Are there any plans to have a lock for those option tokens? Let’s say if the tokens for options are generated, can we lock half the reward tokens and distribute the other half ?
So all the option tokens have underlying asset, when you sell it, you can redeem it back based on the ratio. For example, the options for ETH would require ETH and USDT locked as underlying. We do have plan in the future to use Yearn vault to store these underlyings and generate profits.
As for reward, there will be transaction fees for trading and part fees will be used for non-inflationary staking when protocol gets tractions. Staking rewards are not generated from inflation, but from the purchase back of tokens using partial fees. In the context of staking, the current prevalent inflationary model does not make economic sense. When a token’s supply inflates, it normally suffers a direct inverse correlation with price. Inflationary models are also unsustainable as you can’t infinitely keep minting new tokens, supply should be limited to ensure ongoing viability for early adopters.
9) What specifically causes the antimatter platform to be closed to U.S. users?
So the picture is still unclear. There are some news about the potential to regulate defi. We embrace regulations and are cautious about platform. When we fully launch antimatter Dao and spin off onchain governance , Dao members will make decisions
10) How do you plan to release the remaining antimatter tokens ?
Firstly, we want to explain the incident from a few weeks ago. From project founder perspective, I admit that I didn’t look at things from all perspectives. What happened was the daily unlocks suppress the price and we can see some weak hand early investors selling tokens on daily basis. So we decided to unlock everyone at one point for the three months daily unlocks. But after the drama, I learnt the lesson that everything have different views when you look differently.
For the remaining tokens, we will soon form a governance Dao and invite some reputable people to multisig our protocol rewards. So the Dao will make decisions on these through onchain governance. But that being said, we need to make sure product is working and getting tractions before that.Most of the discussion in the space is about creating velocity sinks for the token, which effectively forces reduction in the token velocity, which coupled with the scarcity of the tokens would create strong price appreciation. The staking has not been done by those who create utilities to the network but has been done by financial speculators to accumulate more tokens for future sell. We will have utilities first
11) Is the team looking out for more partnerships?
Yes. As from our experience partnerships definity boost our community and exposure. Many partnerships are superficial in this space because it only makes some posts. We want to do some real partnerships when our product is working. We have announced a few partnerships and we will deploy versions for options to their network when launch
12) How many team members are working full time on the project?
We have a team of 9 full time right now plus a few part time mathematicians. The core devs include two smart contract coders, two back end , three frontend and 2 testing. Our team is right now quite tech heavy and we will look for expansion to marketing and business development later this year when our project is fully live
13) Is there a possibility to send the unused tokens to a burn address, in the future?
It is possible if governance Dao pass the onchain decision. But from personal perspective, I think having it locked it better than burn because the FDV does reflect projects value
14) When will staking be enabled?
We want to create non inflationary staking, so staking will come into place when perpetual options are live
15) Really insightful answers, Definitely more faith in the project and I think the NFT finance use case is great. As for U.S access. Do you see that impacting price a lot? I know u.s is strict with trading and regulations
This is an industrial question since many defi founders recently discuss about it. We will follow closely
16) There are plans for integration with ADA chain?
If they have a proper way for developers to deploy smart contracts.
17) Have you thought of hiring white hat hackers? + 24/7 security
After Chainswap incidents, we are very very careful now. We have had 4 meetings this week about internal auditing on our V2 contract. If anyone is interested in joining together to find bugs, we are very welcome.The deployment process now is very strict internally, we need to internal audit and then send to third party for external auditing.