Is there any onchain solution for Options trading?
By Option I mean:
That seems possible with smart contracts only. Now, since DAI is available You can Imagine such options priced also in USD.
I’m aware of Augur, but to my knowledge it has off chain dispute resolution.
I’m looking for opensource full on-chain solution
Lets say its 01.09.2018
Lets consider Alice who ownes 1000 ETH and want to insure herself against it’s price loss below 200 USD until 1.11.2018 and is willing to pay 10ETH for such insurance
Lets consider Bob who is bully about ETH would gladly earn some and has 200 000 USD to risk.
- Bob buys 200 000 DAI
- Alice creates SC and deposit 10ETH, smart contract allows anyone to claim that 10ETH if only he/she is willing to deposit 200 000 DAI untill 1.11.2018
- Bob deposit DAI and claims ETH
- Alice has right (but not obligation) anytime before 1.11.2018 to send ETH to SC and get DAI in return in exchange rate of 1ETH:200DAI
- If Alice do so All ETH sended to SC goes to Bob
That would secure Alice against ETH value loss for a period 1.09.2018-1.11.2018
And if ETH stay above 200 DAI/ETH taking DAI deposit by Alice would be irrational and Bob will not get harmed because he would be able to buy back any DAI he lost by ETH he aquired
That SC sounds like Long Put for Alice and Short Put for Bob
Is anyone here aware of such onchain solution existing or in development?
This one above was only an example. In practice that kind of tool can be used to stabilize price of any asset against any other.
As far as I know commodities who has Options market are more stable in price that those who does not one.