Demand for crypto options trading and volatility hedging is booming. Divergence Protocol — a next generation DeFi derivatives and options trading platform — seeks to be the leader in this space and is adopting a broad focus on blockchain native asset prices, LP tokens, interest rates, DeFi farming and staking rewards. What sets Divergence apart, aside from this comprehensive suite of products, is the variety of crypto assets that can be used — something not found on other platforms.
Divergence Features
Divergence initially is releasing a specialized AMM-based marketplace for binary options that provides a simple yet elegant solution for DeFi native volatility risks. This unique solution combines the binary options pricing model with a constant product AMM mechanism. The result is a platform so flexible that it creates a wide range of possibilities for options market-making. With this, Divergence is able to provide many more lucrative opportunities than other DeFi options protocols on the market.
Main attractions of the Divergence solution include:
- Best-in-class capital efficiency: Liquidity provision on-chain is capital inefficient. Options sellers have to over-collateralize their positions when providing liquidity on DEXes. Divergence integrates options minting and market-making into one single-asset AMM pool. This ensures that liquidity providers are able to manage their capital much more efficiently.
The Divergence binary options pools accept funding from LP tokens or capital borrowed from protocols such as Aave. Selling binary call and put tokens requires only 1x collateral and does not involve liquidation. This means that liquidity providers can easily gain option premiums of different terms. - Composable with DeFi bluechips: Liquidity providers can write binary options using any fungible token as collateral including LP tokens from popular Ethereum-based DEXes such as Sushiswap and Uniswap V3. This opens up opportunities to create many new types of options and can potentially redefine the crypto options market as we know of. Traders can find lucrative opportunities with these new options markets and yield farmers on "DeFi bluechips" are also able to hedge their liquidity positions effectively.
- Gas efficient market roll-over mechanism: The Divergence binary options marketplace has an automatic liquidity rollover feature. Upon expiration, liquidity providers do not need to remove their capital if they want to continue making the options market. Divergence options markets are rolled over using identical terms as the previous cycle. This unique feature saves gas for the liquidity providers and is not available on any other decentralized option trading platforms.
DIVER token
The Divergence ecosystem is powered by an ERC-20 token called DIVER. DIVER will serve as the utility and governance token of the platform.
Holders can stake their tokens for a percentage of transaction fees generated from binary option pools.
Additionally, Divergence has a burn mechanism to remove DIVER from circulation permanently. This helps to reduce the supply of DIVER and support the price of the token.
There will soon be a DIVER token crowdsale so join us on Telegram https://t.me/divergenceannouncement to keep up to date with details on that (to be announced soon).
Key Investors and Partnerships
Divergence has gained wide recognition for its approach in building DeFi volatility products. It recently received significant investment from leading venture funds and key project founders.
Earlier in June 2021, Divergence announced that it had completed seed and private funding rounds led by Mechanism Capital and KR1. The funding round also includes prominent VCs such as Focus Labs, P2P Capital, angel investors such as Sandeep Nailwal from Polygon and Igor Barinov from xDai.
Strong backing from key DeFi stakeholders points to a bright future for Divergence. It also has a growing community and it is open to more users who are involved in DeFi farming and trading.
To learn more about Divergence, visit the website https://www.divergence-protocol.com/ and medium page https://medium.com/divergence-protocol.