What is Opyn?
Are you looking for a way to protect your defi deposits from technical and financial risks? Enter Opyn, an insurance platform that is permissionless and decentralized. The need arises from the value of defi that is steadily increasing due to increasing interest among investors. Opyn Options is built on the Convexity Protocol and is a comprehensive insurance solution for the widely growing defi finance ecosystem.
Opyn covers attack from all possible and realistic directions – financial, admin, or technical. The base of the Opyn insurance platform is the protective put option strategy.
But what is this strategy, you ask?
Protective puts are not only used on defi but also stocks, commodities, currencies, etc. It protects the decreasing value of the financial asset. Investors use options contracts to protect themselves from the loss of owning a financial instrument.
The best ways to use Opyn are through the Opyn.co website and the Opyn Monitor Dashboard.
Who is the Opyn Founder?
The founder of Opyn is Zubin Singh Koticha and is also the CEO of the futuristic insurance platform. The other co-founders are Aparna Krishnan and Alexis Gauba. According to angel.co, the company’s mission is to provide empowerment through an inclusive, fair, and open financial system. The group calls itself, quirky and passionate who is obsessed with building a futuristic financial system.
The company is based in San Francisco, USA, and has a team size of fewer than ten members.
Who Are the Investors in Opyn?
The company based in the USA has raised a total funding amount of $2.2 Million. It is thanks to a total of 10 investors. At the time of writing, the latest investors on this insurance platform is A Capital Ventures and Robert Leshner. The total investor list at the time of writing is:
- Dragonfly Capital Partners
- Robert Leshner
- A Capital Ventures
- Dylan Field
- DTC Capital
- Version One Ventures
- Uncorrelated Ventures
- Balaji Srinivasan
All these investors have been part of the seed round of Opyn. Dragonfly Capital Partners are the lead investors.
What are Options?
If you have an options contract, as an investor, you have the opportunity to buy or sell the underlying asset depending on the contract type. It is different from futures. Futures provides the investor the right to buy or sell the underlying asset as long as the contract is effective. There are two types of an Options contract:
The Call Options allow the investor/trader to purchase the asset within a timeframe at a price stated in the contract.
The Put Options allow the investor/trader to sell the asset within a timeframe at a price stated in the contract.
There is an expiry date for each contract within which the investor/trader can either buy or sell. You can buy Options through online brokers. Options provide an opportunity to make profits. But there is still some degree of risk which the investors must weigh.
How to Trade Options on Ethereum And Protect Downside with Opyn?
Defi Opyn is one of the top platforms to use Options to trade ETH. It provides for:
- Security of your holdings against flash crashes and volatility. You can use Opyn to manage your crypto dependent finances in a safe environment.
- Using Options on defi Opyn coin helps you reduce the collateral requirement and result in a lower margin.
- You can earn tokens by using collateral like ctokens and aTokens.
- The funds are safely stored in a wallet that only the user can access, and no one else.
The three simple steps to trade Options on defi Opyn coin are:
- Choose the Series where you select the asset, the type of options contract, and the expiry date until the options contract must be valid.
- Select the amount of options quantity that you want to trade on.
- Then trade! Use your options to buy and sell your trade and make good profits!
How Does Opyn Work?
Through Opyn coin, you can use put options while you trade on ETH. Let us take a small real-time example to understand this. For example, if you have bought ETH for $100, and if the ETH price falls below that, you will lose money when you sell it.
On the other hand, if you have a put options contract, which entitles you to sell your option at a pre-specified price. Suppose this pre-specified price, which is also known as the strike price is $100, you can sell ETH at this price even if the actual market price is lesser. So, you can avoid losses and perhaps buy more ETH with these profits!
Steps to Use Opyn Options
The first step, go to the website, opyn.co.
The next step is to choose the parameters. For this, go to the Hedge ETH risk section. The first parameter you set is the expiry date, which is the date until which you are protected from the contract. Then, choose the strike price that is the price you have the right to sell your ETH at. Last, you choose the protection cost that is the premium you have to pay to buy 1 ETH of protection. Then click the ‘buy’ button.
In the top right corner, you will see an option, ‘Connect Wallet’. Click on it.
Then go through the transaction details and if it seems right, click on the ‘Continue Purchase’.
You will need to provide the amount of ETH for which you need insurance. Once you do this, it will tell you the cost for that quantity.
Then click on ‘Confirm’ and complete the transaction by signing through Metamask. You can check the progress of the transaction through Etherscan.
How to Exercise OTH Option on Opyn Options?
If the ETH price goes below the strike price you have set, you can still sell the ETH at that strike price. It is how you exercise your Opyn option. With the extra profits you make, you can buy more ETH too!
How to Sell ETH Options on Opyn Options?
If you wish to, you can sell your options protection early. If the price crashes, it makes more sense to sell your trade early because it is now more valuable. It will help you cover up for some losses from the ETH price crash, and thus, options are a precious hedge for investors out there.
What is the Gamma Protocol?
Gamma is a decentralized option protocol, which enables the sellers to create spreads. Through this option, the user would be able to buy arbitrary option tokens that provide the representation to buy or sell the underlying asset at the strike price. It is a way to reduce the amount of capital you lock into the system by creating spreads.
What are oTokens?
The Convexity Protocol provides for a protocol for the contracts which are minted in the form of ERC-20 tokens. All the oTokens act as full collaterals by ay arbitrary asset in the crypto-financial instrument space. These oTokens have a handful of parameters defined like strike price, expiry date, and the type of Options (European versus American).
You can purchase oTokens and use these options contract for different investment strategies like leverage exposure and hedging. oTokens help defi users to earn premiums on their ETH holdings by creating collateral for these opyn tokens.
Where to oTokens Trade?
You can find these Opyn crypto options or oTokens at any decentralized exchange with the ERC20 standard. On the official website, opyn.co, you can trade them on 0x.
What is the Opyn Coin Price?
The Opyn price depends on the exchange. On the 0x platform, market makers place the asks and bids that will affect the price.
Opyn V1 vs Opyn V2 – What Is The Difference?
|What Is Opyn V1?||What Is Opyn V2?|
|It was the foundation of defi options through the ERC20 protocol. You can sell, buy and trade options on ETH. Although this version is older, it will still remain to be used on the network and will support American and physical settled options.||On the other hand, Opyn v2 offers European type of options and those that are cash-settled that exercises itself automatically during the expiry of the contract.|
Is Opyn Safe and Legit?
Yes, it is. Opyn options have been pretty serious so far regarding their security measures and internal services. Also, according to various analyses and reviews from the crypto space for options, the options on Opyn options are picking up fast. Opyn works relentlessly behind the screen to identify and remove bugs, the most recent one being the one that led to the double-exercise hack of the platform. But despite this, the overall user reviews for Opyn options have been positive.
Non-Custodial Wallet – Your Keys Your ETH
A wallet being non-custodial brings that additional layer of security. It provides the holders of the crypto wallet, complete control over their funds. The principle behind this is that the holder can control the wallet by having a private key. The provider of the wallet, in no way, has access to these funds. These wallets provide an interface for the users to interact with the funds in it. Opyn options work with non-custodial wallets; they do not have any access to your funds at any point of the options contract period.
Opyn options had asked OpenZeppelin to audit and review the Gamma Protocol (1.0.0 Version). While the detailed report is available at the OpenZeppelin blog site, the summary is as follows:
In the entire audit of the code and security measures, two high severity issues and one critical issue was found. Following these, they suggested some changes to ensure best practices to reduce potential attacks while enhancing the code quality.
Certora Formal Verification
Certora Prover has a report for its formal verification of the Gamma Protocol. Through the work they did in 2020, they proved the implementation of some vital contracts to be in alignment with the formal rules described by the Certora and Opyn options teams. Overall, all the high-end and medium-end issues identified were promptly corrected, and each fix was verified up to the capacity and limitations of Certora Prover. You can check the complete report out on the Opyn’s Options documentation site.
Generous Bug Bounty for Protocol Security
Opyn options have a bounty in place for those who find out the vulnerabilities on their platform. It is a way to encourage the community to engage with the online platform and provide inputs to make them better. The scope of the Bug Bounty program is limited to the Gamma protocol.
For critical vulnerabilities, the reward is up to $100,000. The high level is up to $40,000. For Medium it is up to $5000, and for Low, it is up to $1,000.
While considering severity, the rewards will also be provided based on the impact of the vulnerability and the level of difficulty required to identify such vulnerability. If you discover any bug or vulnerability, do not disclose it in any other manner or to any other person, apart from reporting it to [email protected].
Looming Airdrop with Opyn Token
With Opyn options becoming popular among users wanting to try defi options trading, this could be the year for the awaited OPYN token, and probably, it will be launched through an opyn airdrop.
There is no formal announcement from the team so far for the opyn airdrop. However, one of the co-founders, Aparna Krishnan recently replies to a tweet stating that ‘There is currently no OPYN Token’. It will be an exciting wait to see if any announcement for the opyn airdrop comes up, as the environment is well-nourished for that.
Takeaway – Opyn Options For Opyn Ethereum
Overall, Opyn options are creating a revolution in the options insurance for the defi domain. With the field fast garnering interest among investors and traders, the platform is set to prosper in the future. If you want to check it out, go to opyn.co and register yourself there! All the best with your defi trading.
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates