Introduction♟
This article will serve as a visual guide to navigate our newest product addition that goes by the name of OLP ( Option Liquidity Pools ) To learn more about OLPs, read the article “Here” where we do an in-depth explanation of how our liquidity pools operate.
In Summary-> Option liquidity pools allow buyers of options to exit and sell their position at any time to option liquidity providers at their chosen discount. As a liquidity provider, you'll be able to set a discount at which you desire to purchase a particular option. Once the order is acted upon, Dopex swaps the buyer and seller's assets using its standard pricing model while applying the set discount.
Requirements:
Option Seller
- Gas fees Dopex is built on the Arbitrum network and thus requires native $ETH for gas fees
- An SSOV or SSOV-P (ERC-721) Position Our updated V3 version of SSOVs now provides an ERC-721 token representing your Option Position
- Option Pool Liquidity To sell your position, liquidity will have to be available for someone to take the other side of the trade
Liquidity Provider (Buyer)
- Gas Fees Dopex is built on the Arbitrum network and thus requires native $ETH for gas fees
- USDC / Underlying Tokens To provide liquidity for specific positions, you can deposit in either the underlying token or simply in USDC
UI Walkthrough🚗
#1 First Step
Head on over to the Dopex.io official website, where you’ll be prompted with the landing page. Here you’ll be able to access the Dopex DAPP by clicking “Launch App” on the top right of the page or right in the middle under the title.
#2 Second Step
Once on the DAPP, you’ll be able to connect your wallet in the standard way with either Metamask/Coinbase Wallet/Walletconnect by clicking on the “Connect Wallet” button on the top right, once connected proceed to locate and click the OLP tab, which can be found in the sub-category section on the top left corner of the page next to the Dopex logo.
#3 Third Step
Great! You’ve officially made it on the OLP page and are ready to start trading options P2P, in the next section, we will be continuing the walkthrough but from two different perspectives: the buyers (the liquidity provider) and the sellers (the option holder)
The Option Owner (Selling Option Position To The Pool)🧿
#1 First Step
First things first, in order to be able to sell an option position, you will need to own an ERC-721 token provided by Dopex upon the purchase of an option. To purchase an Option, you can go to https://app.dopex.io/ssov, and here you’ll be able to choose which asset you’d like to purchase a put/call option on.
#2 Second Step
Once you hold an option position and are ready to sell/exit, head over to the OLP page by following the first section of this walkthrough. Here, you’ll notice at the bottom of the page a section for LP positions illustrating the liquidity available within specific strikes and the discount at which they’d want to purchase. To sell your position (at the specified discount) simply click the “Fill” button on the right.
and voila, after accepting the transaction, you have successfully exited your European option position. The assets should automatically be deposited in your wallet.
The Liquidity Provider (Purchasing Options At A Discount)🎱
#1 First Step
Option Liquidity Pools (OLP) allow users to provide liquidity to Option buyers to sell into at any time at a pre-specified discount. In order to add liquidity, head over to the OLP page by following the first section of this walkthrough. Once there, the process is very straightforward, you’ll see on the right side of the page a “Provide LP box”. Within this box, you’ll be able to choose whether to provide liquidity to purchase a put/call, at your chosen strike and discount. Deposits can be made in both the underlying or in stables.
#2 Second Step
After providing liquidity, you’ll be able to see your positions in the “User LP Positions” section in the middle of the page. This section illustrates the Users position, and how much of the User’s liquidity was utilized/how many options were purchased. You can also withdraw your liquidity at any time by pressing the “kill” button on the right side of the section.
That’s it! PS: Always remember to be mindful before aping in.
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📃 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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Dopex reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice.
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