Please keep in mind that the CEO is mentally deficient - none of this so-called “information” should be construed as financial advice. It is merely the musings of a man teetering on the brink of Savant syndrome and clinical retardation.
Background
Every now and then our darling Ethereum blockchain goes through radical upgrades to its design. Last year’s Merge saw the full transition of its consensus mechanism to pure Proof-of-Stake. These stakers earned new $ETH emissions for validating transactions and securing the chain with the caveat that these funds could not be withdrawn until a future upgrade.
Well, ladies and gentlemen, this next phase is upon us.
Engage Operation Shanghai Upgrade Expeditiously!
TL;DR
● Shanghai Upgrade will allow the gradual withdrawal of staked $ETH (~18 million at time of writing)
● This will likely create high volatility in the market with several cases for bull, bear, and everything in between
● Dopex products are perfect for all trading theses:
i) Bullish: Non-liquidable perps, buy calls, write puts
ii) Bearish: Buy puts, write calls
iii) Bull-bear: Buy straddles, trade scalps, provide scalp liquidity
● Send it!
The Shanghai Upgrade
Before: Staked $ETH and staking rewards could not be withdrawn.
Soon: Staked $ETH and staking rewards can be withdrawn.
With over 18 million $ETH locked in the staking contract, on paper this looks like a lot of $ETH that will flood into the market. It is important to note that this amount will not enter the circulating supply immediately.
For partial withdrawals (balance of staked $ETH greater than the minimum 32 requirement), these can be withdrawn immediately.
For full withdrawals and cessation of validator status, these must join an exit queue (typically a few days but depends on the amount of validators left over) before being withdrawable. This restriction ensures that the chain will remain properly secured even after the departure of the withdrawing validator.
The withdrawal queue creates a bottleneck on the amount of $ETH which can actually enter the market.
Intriguing dynamics indeed.
Implications of the Shanghai Upgrade
The Bear Case
For students from the school of ECON1101, that the Shanghai Upgrade will increase the supply of liquid $ETH is not debatable. The 18 million $ETH unlockable is no small number, and even if only a fraction does get withdrawn we can expect an increase to its circulating supply.
“Supply up price down”
Said the honorable Adam Smith (probably)
Additionally, as with any protocol upgrade, there runs the long tail risk of technical hiccups. A lil print(Hello World) in the wrong place and it could quickly become an ‘oh bollocks my Ethereal Dollars’ situation.
Down horrendous.
The Bull Case
With all that said, perhaps there are rainbows at the end of this proverbial $ETH supply rain.
A successful Shanghai Upgrade marks a significant milestone in the development of Ethereum. With $ETH now stakable AND withdrawable, it could open the window to prospective validators that were on the fence for staking but were apprehensive due to the restrictive lock-up.
“Supply down price up”
Said the honorable Adam Smith (probably)
Additionally, the Bear Case assumes that newly unlocked $ETH would exit the cryptocurrency space entirely.
But what if the $ETH was simply restaked to accrue additional staking rewards?
What if, dare I say, some of this unlocked $ETH were to flow into altcoins instead?
A bullish unlock, mayhaps?
Dopex assists in all your Shanghai Upgrade Needs
Similarly to The Merge, the implications of the Shanghai Upgrade on the Cryptographic Currency space is difficult to gauge, with strong arguments for both bull and bear cases. And where there are such polarizing forces at play the one thing to expect is volatility.
As a decentralized options exchange, Dopex is a marketplace for volatility.
Up, down, left, right, crab.
No matter what your thesis is on the Shanghai Upgrade, Dopex has a product for you!
Me think price up
Ah yes, welcome welcome my permabulls. Here are a number of high stakes strategies for your OpOnly mentality!
1. Purchase Calls
Our SSOVs allow you to purchase call options on a variety of assets. Simply pay a premium and lock in the price you want to buy an asset for.
If the price ends up being higher than your strike price, you take home the difference!
Super simple stuff.
2. Non-Liquidable Leveraged Perps
Our non-liquidable perps give you up to 10x leverage on $ETH in a much safer manner than standard perpetuals.
In events like the Shanghai Upgrade where we might expect higher than usual volatility, this allows traders to maintain their direction bias even if there are large wicks that would otherwise liquidate you.
Leverage up. Stay protected. That’s the power of Atlantic options.
3. Write Puts
If you are expecting the price to be relatively stable or go up, writing put options allow you to earn premiums from put purchasers. Since we use $2CRV as collateral, you also earn from Curve farm rewards for the duration of your deposit.
Best of all, higher volatility means you earn higher premiums than usual.
Deposit stablecoins. Farm volatility.
Me think price down
Oh you naughty little bears, what are you doing reading this article! No matter, a number of strategies for you.
1. Purchase Puts
SSOVs also allow you to buy puts, allowing you to lock in a sell price for a given asset in exchange for an option premium.
If the price ends up being lower than your strike price, you profit the difference.
The power of option trading.
2. Write Calls
You can also earn premiums by being the counterparty for call purchasers by simply depositing the underlying asset and writing calls.
If we are expecting high volatility, once again your premiums will be inflated to compensate for this. A number of our SSOVs including $MATIC and $LDO receive additional emissions from their generous protocols.
We do a lil’ farming.
Me don’t know up or down help me
Mid in directionality and mid in IQ - a man (or woman or what have you) after my own heart. For those that are unsure of whether the event is bullish or bearish but are certain on volatility, don’t fret for Dopex once again has you sorted.
1. Buy Straddles
Straddles are a neat little strategy that allows purchasers to profit if the price is volatile in either direction. Inclusivity is very in right now so why be bull or bear when you can be bull and bear!
Price up? Win.
Price down? Win.
Price stable? Lose.
Simply pay an upfront premium and farm volatility in either direction.
2. Scalp trade
High volatility times creates the perfect environment for short time-frame trades.
Our new Option Scalp product allows traders to open up to 110x leveraged positions on $ETH and $ARB.
This allows users to trade on short time-frames from 1m to 60m at a very cheap cost.
Splendid!
3. Provide scalp liquidity
For the more passive investors, you can provide single-sided liquidity for Option Scalps and earn premiums for doing so.
Best of all, you are not exposed to trader performance so you can rest easy and earn yield passively regardless of how many Nutoro D. Chutoro trader extraordinaires are using the scalp platform.
“#OpFi”
Said my beloved intern.
Closing Comments
Wow, Mr. Dalai Lama. You truly are, dare I say, "lingually" gifted.
The Shanghai Upgrade is an exciting time for all Cryptographic Currency Enthusiasts and a huge milestone for my fellow traders.
With all the so-called “building” that my colleagues at Dopex have been doing behind the scenes, the CEO is proud to be able to provide the decentralized options infrastructure to meet your proverbial option needs.
Onwards and upwards, Employees!
Warm regards,
CEO
TEE HEE
—
About Dopex
Dopex is a decentralized options protocol that aims to maximize liquidity, minimize losses for option writers and maximize gains for option buyers — all in a passive manner.
Dopex uses option pools to allow anyone to earn a yield passively. Offering value to both option sellers and buyers by ensuring fair and optimized option prices across all strike prices and expiries. This is thanks to our own innovative and state-of-the-art option pricing model that replicates volatility smiles.
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