Dopex v2: CLAMM now live!
Good mnueenis my beloved reader and welcome to the first release in the long-awaited Dopex pipeline.
We are getting CLAMMed up, my brothers and sisters.
What is the CLAMM?
To understand how the CLAMM works behind the scenes, we have provided extensive content on its mechanics which you can read here.
For those unfamiliar, the Concentrated Liquidity Automated Market Maker (”CLAMM”) is the first arm of the Dopex v2 upgrade - the end-game for on-chain options. Liquidity providers will be able to provide liquidity to earn standard trading fees from an underlying v3 DEX (e.g. Camelot v3 and Uniswap v3), premiums, and other rewards. Traders will be able to tap into this liquidity to trade American-style options on all their favourite tokens.
At launch, we will be offering markets for ETH/USDC, wBTC/USDC, and ARB/USDC. We will gradually roll out more markets and intend for the CLAMM to allow for option trading for all tokens!
Let’s look at both sides of the CLAMM in more detail.
CLAMM for LPs
As a CLAMM LP, you are depositing liquidity on Dopex and receiving far more efficient utilization than standard LPing with no (or minimal) opportunity cost - i.e. more yield, same exposure.
Currently, only single-tick liquidity will be supported although we will roll-out direct deposits of v3 ranges as soon as possible.
If your liquidity is unutilized on Dopex, it will remain in its original AMM. This means there is no opportunity cost relative to normal v3 LPing as your unutilized liquidity remains eligible for standard trading fees!
When your liquidity is utilized by Dopex, it is withdrawn from its original AMM and reserved and you earn a premium paid by option traders. Any impermanent loss you incur is simply given to the option purchaser - once again, this means there is no opportunity cost relative to normal v3 LPing.
There are four big points on CLAMMs for LPs
- Positions remain on the underlying AMM if unutilized and can continue earning trading fees (i.e. baseline yield remains the same)
- Premiums are way more lucrative than standard trading fees (i.e. more yield on the same liquidity)
- Out-of-range v3 liquidity that otherwise do not earn trading fees are now eligible for premiums (i.e. yield on liquidity that is otherwise idle)
- You have identical exposure as standard LPing since we simply repackage your impermanent loss as settlement costs (i.e. v3 LPing = CLAMM LPing exposure)
CLAMM for Traders
For those that used SSOVs, you may have found them rather clunky and unintuitive. Fret not, traders, as we introduce a BRAND NEW option trading experience with the CLAMM.
Flexible Strike Prices
The CLAMM offers a significantly wider range of strikes as we can use any tick as the strike price.
This gives traders much more flexibility on prices they want to hedge or speculate on.
Gone are the days of weeklies and monthlies bootstrapped and expired manually by our beloved Dark King.
Enjoy expiries from 20m to 24 hours on any of your favourite tokens.
“Oh wow, great, my options are printing!”
“Oh bollocks, they have expired worthless.”
Many such cases.
The CLAMM introduces American-style options, meaning the above scenario is now no fault of our design but a fault of your own - you will now be able to close your positons at any time before expiry!
Talk to me about incentives, Mr. Nut
Oh you conniving devil, allow your finest educator to inform.
During the Arbitrum STIP period, we will have 600,000 $ARB allocated to the following over 3 months:
- 250,000 $ARB to ETH/USDC
- 200,000 to wBTC/USDC
- 150,000 $ARB to ARB/USDC
Incentives will be distributed via Merkle to the Dopex Uniswap Handler contract and will be focused on positions within a +/- 2.5% margin of the current spot price, ensuring deep liquidity at ATM strike prices.
This distribution mechanism is customizable and may change in the future.
What else is coming for the CLAMM?
While the CLAMM is live, we will be iterating on its design and features based on user feedback.
Some of the cool things we have in store include:
- Direct deposit of v3 range positions
- More v3 AMMs supported (looking at you, Mr. Camelot)
- More markets (and pairs) for tradooors
- More expiries for tradooors
Another interesting point is that CLAMM positions are completely composable and may be integrated with other protocols!
We are very excited indeed to finally release the CLAMM to our budding option traders.
Please do remember that the CLAMM is just the first arm of Dopex v2 - keep an eye on our socials for information about rDPX v2 and the Options AMM.
Until next time, my beloved readers.
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.
Follow our official social media accounts and visit our website to stay up to date with everything Dopex.
Be careful of fake Telegram groups, Discord servers and Twitter accounts trying to impersonate Dopex.