Understand AntiMatter in one article, and use the simplest addition to build an on-chain option agreement

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Value(long) + Value(short) = C

New projects in the bull market are always so curious. Although the application of AntiMatter has not yet been officially launched, some information disclosed by the official has initially revealed its appearance. This article will try to explain to you how AntiMatter is built in the simplest language The so-called perpetual option agreement.

I don’t know if you have used the US presidential election prediction contract launched by FTX a while ago, or the star insurance agreement Cover Protocol. The biggest commonality between these two products is that the two results of whether something happens or not are tokenized. For example, Cover Protocol will issue two tokens, CLAIM (representing compensation) and NOCLAIM (representing no compensation) on whether (within a certain period of time) to pay for potential hacking events of a certain contract, the total value of CLAIM + NOCLAIM Always equals 1.

In AntiMatter's view, if the timeline is extended, the price performance of cryptocurrencies will only have two results - up or down, so it is completely possible to build simple and unique derivatives around a certain currency in a similar way commodity trading services.

AntiMatter believes that option products are composed of positive bullish forces and negative bearish forces. From an economic point of view, these two forces can always cancel each other out, so their sum should be constant and equal to a certain constant.Presented in the form of tokens, it is Value(long) + Value(short) = C.

In the AntiMatter protocol, market creators (such as market makers) need to deposit a certain amount of stable coins (also denoted by C) in advance, and then can generate a pair of tokens representing bullish and bearish, with ETH as the target is + ETH($C) and -ETH($C), if you deposit multiples of C at one time, you can get multiple pairs of tokens with corresponding multiples.Users can freely trade +ETH($C) and -ETH($C) in the market to establish long or short positions. The prices of the two tokens will fluctuate with the price performance of the underlying assets, but the difference between the two values and always equal to C.

• For example, if the current ETH price is $2,000 and the market creator deposits $4,000 into the protocol, then one can get a +ETH ($4000) token representing bullishness and a -ETH ($4000) token representing bearishness. ) tokens, at this time the value of both tokens is $2,000, and the sum of the two is $4,000; if ETH rises to $3,000, then the value of +ETH($4000) will also rise to $3,000, -ETH The value of ($4000) will drop to $1000, but the sum of the two will still be $4000;

It should be noted that, as shown in the above example, the price of the bullish token +ETH($C) generated by the AntiMatter protocol will always anchor the spot performance of ETH, so in order to motivate users to hold +ETH($C) instead of ETH spot , users who hold -ETH($C) need to pay a certain funding rate to users who hold +ETH($C).

However, in real-world market transactions, although the sum of the value of bullish tokens and bearish tokens is always equal to a constant C, the real-time price performance will inevitably be unanchored.In order to ensure the smooth execution of the basic formula of "Value(long) + Value(short) = C", AntiMatter supports users who hold a pair of bullish and bearish tokens to redeem stablecoin assets with a constant C, and use arbitrage behavior to maintain the formula Stablize.Specifically, if the real-time price of +ETH($C) and -ETH($C) combined exceeds the constant C, then arbitrageurs can "deposit stablecoins - generate a pair of tokens - sell" Conversely, if the combined real-time price of +ETH($C) and -ETH($C) is lower than the constant C, then the arbitrageur can "buy a pair of tokens - redeem stablecoins" way to reverse arbitrage.

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Simplify user operations as much as possible

articlearticle, the project team mentioned that the outbreak time of DeFi is highly consistent with this round of bull market. In the long run, almost all tokens are rising positively during this stage, and users will also have stronger risk appetite. To participate in various liquidity mining activities, which has promoted the rise of spot trading platforms such as Uniswap.

However, the currently prosperous DeFi system has not experienced a brutal bear market test, but a bear market will eventually come. Historical experience shows that in a bear market, people’s tendency to trade spot products will be relatively reduced, and derivatives trading services that support two-way operations will instead more popular. Looking around the entire market, although various DeFi derivatives trading protocols emerge in endlessly, the experience of most projects is not friendly, and it is quite difficult to understand the project logic. The market lacks a derivatives trading platform that allows people to easily perform operations.

AntiMatter said that based on this background, the team’s most important thing when designing products is to simplify user operations as much as possible, so they chose to abandon the traditional option model. The new model means a more flexible design. In particular, AntiMatter's option service abandons the time factor in traditional options. In a sense, this will become a perpetual option, and users can Hold bullish or bearish tokens and wait for the right real time before choosing to sell.

At present, AntiMatter has not disclosed too many product details, and there is no link to the white paper of the project on the official website for the time being, but judging from the screenshot of the homepage, AntiMatter’s token may be called MATTER.

On the whole, AntiMatter has given a fairly novel design idea for on-chain options, and there is plenty of room for imagination in the future. But at the same time, some key issues seem to need further explanation, such as how to build sufficient liquidity for bullish and bearish tokens? Another example is whether it is necessary to introduce a liquidation mechanism under extreme market conditions?

Just like the market price of ETH in the previous example of 2000 US dollars, depositing 4000 US dollars into the agreement can get +ETH($4000) tokens and -ETH($4000) tokens worth 2000 US dollars. In theory, the price of ETH may exceed the constant C (this At this time, -ETH($4000) will drop to a negative value. If there is no liquidation mechanism, can the rights and interests of +ETH($4000) token holders be fully protected?

Many details still need to wait for AntiMatter’s further information disclosure, and Odaily will continue to pay attention to the project.