The risk-hedging instruments in digital economic space were added to the Tera decentralized platform: “Token-option” and “Ambassador”.
Futures and options have become those derivatives of the financial market that help to manage risks. Such instruments become even more relevant during cryptocurrencies trading, as their value is several times more volatile than of traditional assets.Therefore, many companies are careful of using digital coins for settlements, even when this option is more convenient than paying with fiat money.
It is necessary to find a reliable way to insure cryptofinance against jump in prices.
Tera suggests hedging risks with token-options.
Token-option
Token-option is a smart contract that allows you to create a derivative financial instrument based on cryptoassets. Such a derivative should cause both speculative and hedging interest on the exchange.
Anyone who understands the specifics of smart contracts can issue options and receive a bonus for this along with additional profit. An ordinary market participant does not have to go deep into dapp features and can directly proceed to market operations.
A trader sees a list of available derivatives of cryptoassets in a listing of a decentralized trading platform. For convenience, the token line also displays its conditions: the duration of the contract and the fixed value of the coin. A suitable position is selected and a purchase is made.
To receive and store a token option, it is enough to create an account in the wallet. It takes no longer than 15 seconds to create Tera wallet.
As much as that is needed for new accounts opening. A small guide from a community member will help to get onto this.
The number of accounts in the Tera wallet is not limited, and their creation does not require costs. To work with each application, you can connect a separate account, which allows you to analyze the effectiveness of various tasks without mixing transaction data.
The display of accounts with cryptoassets is regulated by the buttons “Hide account” and “Show All accounts”.
The token holder can sell it back on DEX or use the acquired right before the expiration of the term on the principle of the American option.
To conduct operations with tokens, Tera creators have developed a new interface. Its functional is as user-friendly as possible and allows you to make the process of concluding transactions on DEX simple and straightforward.
Token-option issue
A special instruction will be written for professional market participants who decide to become suppliers of a digital derivative to a decentralized trading platform. To activate the smart contract, a fixed fee must be paid.
After that, an application will appear in the list of dapps, allowing you to set the conditions for the token-option.
The issuer of the cryptocurrency option selects the base coin and method of calculation, sets the price and validity period of the specified conditions. To do this, three accounts are attached to the dapp:
The issuer of the cryptocurrency option selects the base coin and method of calculation, sets the price and validity period of the specified conditions. To do this, three accounts are attached to the dapp:
- On this account, the quantity of coins necessary for delivery is frozen;
- Directly option token account;
- Account for receipt of funds upon execution of the contract.
Thus, a unique token came into being. Its value becomes a premium of the issuer .
Thus, traders get the opportunity to profit from the purchase / sale of such an asset, and cryptocurrency businessmen can insure themselves against sharp price fluctuations.
Advantages of token-options on a decentralized platform
The example of the “Token-option” dapp shows us clear advantages of a decentralized financial system:
- no dependence on departmental bodies - no need to wait for their approval to add a trading instrument to the listing. It can take months, if not years, to wait for that. The digital economic space is developing very fast and such periods are too long for it. In addition, only top coins are considered by state authorities, while the cryptocurrency market has hundreds of altcoins and the need for hedging may arise for any of them;
- cryptocurrency market participants get more opportunities for building strategies;
- the issuer of token options has a choice, which of the presented coins to take as the underlying asset (i.e. whose price will be frozen before the expiration date) and which coin will express the value;
- the demand for a token option is determined by supply and demand. In the absence of demand, the issuer will change the terms of the smart contract and create a new trading instrument.
Moreover, decentralized markets exclude expenses on intermediaries, guaranteeing the fulfillment of obligations. If on a centralized trading venue the role of the guarantor is played by the exchange or marketmaker, then the blockchain technology allows you to transfer these obligations to the smart contract algorithm.
An example of a decentralized trading platform is the exchange on the Tera platform, where trading is conducted without going through the KYC procedure, without paying commissions and requirements for a minimum deposit/withdrawal of funds.
Ambassador
Tera Foundation uses one more form of smart contract for price fixing in the process of agreements with partners. For the user convenience, its interface is presented through the application. Dapp "Ambassador" is similar in functionality to a deliverable option, but has zero cost.
For those who want to promote the Tera project, the price of the native cryptocurrency is fixed for a certain period. During this period, a company or private person can conduct financial planning without worrying about price swings, and even get additional profit when the price of a coin increases.
The application was announced on August 21, 2019 by the main developer of the project Yuri Ivanov (vtools) on the Discord channel. He told about the purpose of the "Ambassador" Dapp and how userfriendly it is.
Testing of operations with derivative cryptoassets was highly successful.
New decentralized finance applications Tera confirm the multipurposeness of blockchain technology. These types of smart contracts can be used not only for cryptocurrency, but also as the basis for any values or interests.
In the near future, the development team plans to launch a dapp for sports betting, which will work on a principle similar to the “Token-Option”.
Tera Cryptoсommunity
The Tera blockchain project is continuously evolving. Recently was run the dapp for anonymous transactions. Development is going on in other areas, such as gaming, gambling, social networks, online shopping.
The characteristics of the Tera platform allow to implement the most daring ideas: block generation every second, TERAHASH algorithm, PoW consensus, speed above 1000 tps, JavaScript smart contract language with a dialog interface in HTML.
- be the first to learn about innovations on the Tera platform;
- participate in software testing;
- express your opinion (and it will certainly be taken into account!);
- get a reward for your contribution to the development of the project;
- participate in promotions, airdrops, bounty programs from Tera.
Tera Foundation team suggests to create the future of digital technologies together.