OPT: Biggest DeFi Project X DaoMaker
The emergence of the Decentralized Finance (DeFi) sector has seen projects that offer decentralized versions of services offered by more traditional financial institutions gain significant adoption. These include decentralized credit/lending protocols, and this has in turn led to the rapid growth of token mining and yield farming within the DeFi sector. The high levels of enthusiasm DeFi generates have resulted in the rapid entrance of new users who are fascinated by the almost limitless financial possibilities which can be achieved without the need of middlemen or third party intermediaries.
DeFi has been dominating discussions for many months, and in many ways is just getting started. At its recent peak, the overall DeFi ecosystem had over $8 billion in locked value, with top DeFi lending platforms such as Aave, Maker and Uniswap each accounting for total locked values well in excess of $1B.
OpenPredict Protocol is a newly launched DeFi protocol that enables its users to turn live speculations into liquid assets, and turn their predictions into capital-backed assets. The protocol allows predictors to mint event-specific tokens, which fluctuate in market value, relative to changing market odds. OpenPredict operates a tri-smart contract system for each event; and one acts as an escrow for event predictors, while the second contract mints tokens that represent correct predictions. Finally, the third contract mints tokens that represent the incorrect predictions.
This innovative project has already proved to be highly successful and has given early participants returns of over 5,000% since its launch. The successful launch phase was supported by leading industry accelerator, and social mining pioneer DAO Maker, which is well known for supporting other top quality, pioneering projects including Elrond, Orion Protocol, and NEM.
Product Expansion & Use Cases
OpenPredict presents a wide variety of opportunities for people to engage in live prediction markets, and turn their live predictions into fully tradable, capital-backed assets. In addition, the protocol presents a number of potential use cases that appeal to crypto traders, investors, and speculators.
Despite the well-known dangers of going “all in,” cryptocurrency traders are known to sometimes over-expose themselves to a single asset when in search of significant gains due to asset appreciation. This generates severe idiosyncratic risk which can lead to sudden and severe decreases in portfolio value.
At the same time, the crypto sector contains dedicated long-only funds and trusts, which, per thesis and mission, are dedicated to a simple buy and hold strategy. These funds and trusts are also severely exposed to idiosyncratic risk.
OpenPredict provides retail and institutional traders and investors with the opportunity to hedge their risk by issuing options that can reward them in the occurrence of extremely volatile markets, such as the crash of March 12, 2020.
OpenPredict Protocol can enable the creation of products similar to default swaps, and these financial instruments have traditionally served investors who seek some monetary recuperation in a case that a company goes bankrupt.
While protocols cannot go bankrupt, they can be exploited for the funds they hold on behalf of liquidity providers. This has the same catastrophic effect as a bankruptcy, as the protocol can end up with significantly fewer funds than those owed to liquidity providers.
OpenPredict creates default swaps for established market protocols such as Compound that hold significant funds on behalf of Liquidity Providers (LPs). These default swaps provide LPs partial or complete coverage for any funds lost in the case of a protocol exploit.
Although trading volumes across Decentralized Exchanges (DEXs) has increased significantly over 2020, Centralized Exchanges (CEXs) still account for the vast majority of total trading volume.
The same is true for order book depth, and the depth of order books is critical for highly leveraged trading, and as DEXs currently lack depth, the DeFi sector is not yet in position to support decentralized high leverage trading. Decentralized options trading is growing though as it does not require significant DEX order book depth as oracles capture the price from all market providers, including CEXs.
OpenPredict facilitates trading that follows robust, accurate pricing and supports heavily leveraged option market trading. A powerful advantage of an open market for options is that it can even enable leveraged trading of assets that do not have a market yet, and can enable a form of synthetic futures trading through options that expire upon asset listing.
OpenPredict opens up a new world of possibilities with regards to predictions markets and options/derivatives trading. The team behind the project also aim to simplify and enhance the process of engaging in live markets via the development of the TrustPredict and Oswap services.
Some blockchain applications can still be characterized by difficult to navigate UIs that can be discouraging to newbies, and take away the fun from getting involved. TrustPredict is a simple decentralized application (dApp) that enables users to quickly get started making predictions. The dApp will allow for predictions on almost anything and uses a straightforward form-like measure to explain the reward situation, enabling users to create predictions and see the rewards accrued for correct or incorrect predictions.
Oswap will be a swap network dedicated to the trade of tokens minted for every event launched via the OpenPredict protocol. Uniswap currently collects a 0.3% fee for the swap of “o” and “io” tokens, and Oswap slashes this fee by 50% and will collect just 0.15% for every swap trade executed. As a further engagement incentive, OpenPredict Tokens (OPT) will be airdropped to traders who add liquidity in Oswap in order to attract active users into the protocol.
OpenPredict Social Mining
Social mining is an innovation that has helped increase the utility value of any projects incorporating it as one of their community activities. Social mining has in most cases resulted in a significant amount of traction and attention to projects which have chosen to collaborate with DAO Maker and make use of a Decentralized Autonomous Organization (DAO) that enables participants to take part in a range of social media and community-focused activities. Elrond, for example, experienced incredible growth in value and visibility after initiating the social mining programs, with 2key and NEM following suit in their growth.
Each month at least $5000 worth of OPT tokens will be distributed via the OPT hub to platform contributors with a preference to contributors that bring the most impact to the project. Participants are required to stake at least 25 OPT tokens to qualify for the OPT mining distribution, and the reward is expected to increase closer to the TrustPredict launch in Q2 of 2021.
Any interested participants can learn more about the OPT social mining hub using here, and also take part in the mining program.