Decentralized finance (DeFi) is evolving at such a fast tempo that new funding automobiles are being rolled out each day, and Opium is providing the most recent.
In what it has described as “a technique for bearish traders” the artificial derivatives Opium Community has unveiled a product providing safety in opposition to giant downwards actions in Ethereum costs.
Opium defined that its “ETH Dump Safety” relies on a “protecting put” which is a technique for traders who imagine that the value of an asset will decline sooner or later, including:
“It may be utilized by bullish traders to hedge in opposition to potential losses and get a safety to the draw back,”
In a tweet on June 13, Opium stated that it really works like some other decentralized insurance coverage. Traders buy safety for a premium and within the case that the asset drops under the strike value, they obtain the distinction between the strike value and the present worth of ETH.
Encouraging the bears
Derivatives present the choice to quick an asset, and this primarily is encouraging that motion by providing rewards if the asset crashes.
“In case you are bearish on an asset, you should use ETH Dump Safety as part of the basic shortening technique – if you happen to imagine that ETH will plummet reasonably than develop, buy ETH Dump Safety and obtain payouts when ETH goes down.”
The providing is a part of the protocol’s Opium Insurance coverage suite launched in December 2020 providing differing ranges of safety for varied DeFi methods, good contracts, and crypto belongings.
In early April, Opium Finance partnered with Gnosis and the Common Market Entry (UMA) platform to introduce optimistic oracles which might be extra correct and fewer susceptible to cost manipulation.
Later the identical month the DeFi protocol unveiled a “Turbo ETH” leveraging product which allowed merchants to make leveraged bets on value will increase.
The most recent announcement from Opium was in late Might for a derivatives based mostly product to insure SpaceX launches.
OPIUM value outlook
Opium’s native token of the identical title has gained 3.4% on the day to achieve $2.15 on the time of press.
Its value has been steadily trending down since early February, nevertheless, and is presently a painful 90% down from its all-time excessive of $23.
With a circulating provide of 6.7 million tokens, OPIUM has a present market cap of $14.3 million making it a minnow when in comparison with many different DeFi tokens.
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