The fast-growing DeFi Divergence protocol has revealed that its highly anticipated IDO for its own token DIVER will take place on September 20, 2021. 2% of the total supply of DIVER tokens will be available in the Dutch auction on the MISO SushiSwap launch site. Members will be able to become early holders of DIVER tokens and be able to claim from a pool of 256 non-fungible DIVΞR tokens, the first batch of NFTs ever issued by Divergence. Following the completion of the IDO, DIVER tokens will be available for trading on SushiSwap, with additional listings expected in the future.
DIVER is a governance token that supports the Divergence ecosystem. This serves as an economic boost for the Divergence community. Token holders will be able to place bets on DIVER tokens and receive rewards.
The divergence has also agreed on a strategic investment with Huobi Group, the investment arm of Huobi Group. Huobi Ventures joins the list of strategic investors including AscendEX that support the divergence protocol.
Talking about the development of Huobi Research Analyst, Alex Dong said that it was not difficult for an investment company. “For us, we strongly believe that the divergence protocol will be one of the most important pieces in the Defi puzzle.” He added.
What is divergence
Divergence is a decentralized hedging and volatility trading platform that focuses on blockchain proprietary asset prices, LP tokens, interest rates, DeFi farming, and staking rewards. Divergence also offers traders the opportunity to gain synthetic volatility for decentralized assets that are not available in traditional cryptocurrency markets.
Users have unlimited access to create custom binary options markets. They can receive volatility premiums in addition to the lending and liquidity growth income earned under other protocols.
The divergence roadmap contains important products including binary options, derivatives, and profitability stores that include volatility trading strategies.
Why use divergence
Divergence aims to fill the gap in providing easy-to-use hedging tools for on-chain volatility. His approach is to create a binary options market based on AMM, which is the flagship product of the Divergence derivatives suite.
Binary options are nothing new in the cryptocurrency space. This type of option provides non-linear exposure to fluctuations in the price of DeFi assets. This allows traders to create leveraged positions in digital assets at a lower cost than making direct transactions.
Settlement offers a flat rate instead of a theoretically unlimited rate for standard options. This limits the risks of selling options. A simple binary options pricing mechanism allows a predetermined number of tokens to be exchanged upon expiration between buyers and sellers.
Divergence is based on the concept of this type of options to create a simple yet powerful mechanism. This simplifies the process of creating a market and trading within your pool. Binary Calls and Binary Puts – identifiable as Spear and Shield tokens in a Divergence – are quoted in pledge units and stacked into a single collateral.
Retail traders can easily understand and account for the risk reward of these options. They always pay a portion of the option collateral and receive a maximum of one collateral if they make the right prediction.
Unique synthetic options market driven by AMM
Divergence provides users with many options to customize their positions. Using their AMM pools, LPs can create synthetic derivative tokens without permission through a one-step minting and distribution process.
Only one type of collateral is used per pool. Swaps between peer pools occur in the same smart contract pool where the options market is created. The Divergence AMM Options Market is unique in that it has:
Compatibility: Liquidity providers can create binary options with any fungible tokens as collateral, including LP tokens of other DEXs. This greatly increases the capital efficiency for traders and allows the flexibility to create, say, a SUSHI / USD options market using xSUSHI. This is not easy to do on centralized trading platforms.
Continuity: Divergence pools automatically execute trade positions. When the options expire, the unclaimed LP liquidity is automatically rolled over on identical terms. Thus, liquidity providers do not need to move capital to create new pools. This feature differs from other protocols in which option tokens have hard expiration and liquidity providers must create new markets for each option expiration.
Capital efficiency: Capital efficiency is a concern for many liquidity providers. Managing liquidity provision in the presence of multiple strikes and expirations can be capital intensive. Divergence deploys a system that helps liquidity providers manage their capital effectively. Liquidity providers can use LP tokens or leveraged capital from lending protocols to create binary options pools.
In addition, there is no excessive collateral required to write and purchase option tokens. This is due to the fact that predetermined payments for buyers of binary options are reserved by smart contracts. Because of this, LP will only need 1 collateral to record the binary call and binary path.
I look forward to
Divergence has also made significant strides in its ecosystem with the launch of Divergence V1 Testnet… Traders can get a head start by trying out various innovative features of the platform.
The Divergence roadmap also has a host of events planned for the fourth quarter of 2021. After the IDO is published and the tokens are listed, Divergence plans to launch its network upon completion of the audit. With the launch of the mainnet, traders will have access to decentralized options markets for more assets, more collateral options, and an updated interface.
💬 Telegram: https://t.me/divergenceprotocol
📢 Telegram announcement: https://t.me/divergenceannouncement
Disclaimer: This is a paid post and should not be construed as news / advice.