Recapitulation of DERI PROTOCOL PROJECT AMA event held at AMA LOVERS CLUB.
Venue: https://t.me/amaloversclub
Date: Saturday, 27th February, 2021
Time: 11:00 UTC
The DERI PROTOCOL PROJECT team was represented by @Im0xAlpha who judiciously shared with us detailed knowledge and information about DERI PROTOCOL PROJECT.
1st Segment: INTRODUCTION
Q1: Can you please introduce yourself and your background, also introduce the Team working on the Deri Protocol project?
ANS: I am the co-founder and CEO of Deri Protocol. I am a Physics BS from Peking University, Physics PhD from Rice University. I have worked in Wall Street on derivative pricing/structuring, trading strategy design, risk management in Deutsche Bank, HBK hedge fund, Goldman Sachs. I also co-founded a quantitative hedge fund for quant trading in traditional finance as well as in crypto.
from the past careers, I have quite some experiences in structuring/pricing/trading of financial derivatives.
feel free to follow my personal twitter on:
https://twitter.com/0x_alpha
The team designing and developing Deri Protocol is called DeFi Factory. It is a team of experts of finance, math and computer science.
The core members, just like me, have PhD degrees in science and come from Wall Street. The team has been in the crypto trading and solidity programming field for several years.
Q2: Can you introduce the DERI PROTOCOL project, what critical problems does it solve that existing solutions are not solving and what's the competitve advantage?
ANS: Deri is a decentralized protocol for users to exchange risk exposures precisely and capital-efficiently. It is the DeFi way to trade derivatives: to hedge, to speculate, to arbitrage, all on chain. This is achieved by liquidity pools playing the roles of counterparties for users. So you can think of Deri as a Uniswap-styled BitMEX.
With Deri protocol, risk exposures are tokenized as NFTs so that they can be imported into other DeFi projects for their own financial purposes. Having provided an effective on-chian mechanism to exchange and hold risks, Deri protocol has minted one of the most important blocks of the DeFi infrastructure.
As for the problem Deri solves, I wrote an article on this issue, explaining why we need an DeFi derivatives solution and what are exactly needed.
https://medium.com/@deri_protocol/the-road-to-defi-derivatives-a55c32fcbf1d
Baically, I summarized four important features:
1. it should provide real derivatives: trade risk precisely and capital-efficiently
2. it should be real DeFi: things take place on chain
3. it should be composable
4. it should be open, not enforcing any "in-house chip"
And to my knowledge, Deri Protocol is the first DeFi derivatives solution with these 4 defining features.
Q3: Can you briefly describe your PARTNERSHIPS?
ANS: haha, we are making a number of friends in the DeFi community already and we are making more
for example, the algorithmic stablecoin project Basis is an important parnter as we provide a significant use-case for their stable coin.
and we have such cooperations with dForce, autofarm, etc
also we had technical discussions a lot with the devs of Sushiswap
These are all examples of partners from different kind of cooperation. going forward, we will develop more of such partnerships.
Q4: Sequel to the Ever increasing Inefficiency of the ETH blockchain over, do you think of having plans for a bridge or migration to Binance Smart Chain?
ANS: Well, we don't just have plan of that :)
basically, we are leading a new trend, which we summarized as a slogan "Three Chains, One Ecosystem".
The 3 chains refer to ETH, BSC, HECO. We already have premining pools deployed on these 3 chains. Among them, the BUSD pool on BSC is the largest, with a TVL of about 18M$.
As of now, DERI is only an ERC20 token. but cross-chain bridge was just developed and currently under testing. Next week we will roll it out so that people will have DERI on BSC and HECO.
On thing to be noticed: even though Deri protocol is deployed on 3 chain, it's under one unified ecosystem. Hence the slogan "Three Chains, One ecosystem".
Q5: Can you give an overview of your Tokenomics, and the UTILITY of the Deri Token?
ANS: DERI has an ultimate Total Supply (Fully Diluted Total Supply) = 1B, which is the number of DERI after all the mining tokens are mined out (in decades).
And it has an initial Total Supply = 400M, which is the number of DERI minted at DERI's genesis block. These are the non-mining part and are distributed to the team, investors and foundation (project treasury). Among them, 360M are locked for the team and investors.
DERI is a governance token + fee token.
Governance-wise, going forward all the governance and community decision-making will be based on DERI.
As the fee token, DERI will be used in a number of scenarios, such as paying for transaction fee (to be implemented), use DERI to bid for right to launch a pool, etc.
And there are some innovative ways of DERI token value. For example, people need to stake DERI to be a qualified liquidator, which is a role in the Deri trading ecosystem and it's profitable.
Also, we are developing something like Sushiswap's xSushi, which would enable DERI holders to share the transaction fees.
2nd Segment: LIVE Questions
Q1: If I'm right, Deri Protocol is built for derivatives and not spot, however, vast majority of Crypto users are into spot trading, only few experts know about derivatives, this makes me wonder why you decided to focus on derivatives and not spot?
Don't you think the Technicality and complexity of derivatives would serve as a barrier for users trying to use Deri or how do you aim to make the platform as simple as A B C for them to use?
https://twitter.com/BisolaHafsat/status/1365620629022588928?s=19
ANS: Good questions. I believe projects like Uniswap/Sushiswap/Balancer/Curve/Pancake take care of the spot trading pretty well. And DeFi needs derivatives too. Just take a look at the derivatives trading of CeFi (exchanges like BitMEX, Deribit, FTX), the demand of derivatives is just as huge as that of spot. But of course you need to learn the basics of derivatives first before you do the trading. We have testnet for you to practice before put you real money in.
Q2: Deri Protocol supports two kinds of oracle which are the On-chain oracle smart contract and/or the Off-chain oracle server. Which oracle is Deri using presently? Why the decision to use the oracle and are you planning to use any other oracle solution apart from the present one?
https://twitter.com/KurangaHA/status/1365432563620315136?s=19
ANS: The first batch of pools will be based on off-chain oracle server. It needs oracle because derivative, by its definition, has its value (hence price) dependent on underlyer's price. Of course we are planning on using other oracle solutions. We are even cooperating with some DeFi projects to develop better oracles.
Q3: In Deri, your trading position is represented by an NFT token (ERC721). Basically when you establish a position Deri pool will mint an NFT containing all the position info, right? So, what can we do with this NFT? CAN we do whatever we want just as any other token?
https://twitter.com/Eliasbb_Pro/status/1365620141837275137?s=19
ANS: Yes. You can hold/transfer or do whatever you can do to a token, just like any other tokens.
Q4: Can you tell us more about your partnership with @FBGCapital? How does it benefit the @DeriProtocol community?
https://twitter.com/mikenit890/status/1365614596166459395?s=19
ANS: FBG invested and provided a lot of resources to us.
Q5: Who have the right to change/add pool on your website? Is it possible to create a pool by myself?
https://twitter.com/GasanHasan3/status/1365623069931237379?s=19
ANS: Good question. It’s not open yet as of today but will be opened in the future. Not too far away.
Q6: Can you share with us some of the success story on your exchange risk exposure and capital efficiency? I believe it will inspire confidence in more people to invest?
https://twitter.com/nzekenobi1/status/1365617074928832513?s=19
ANS: it's a good question but the answer is a bit complicated to be address in a short answer. I would write a article on this. Meanwhile, you might want to check out the wp. the risks (really faced by LP) and the corresponding mitigation are explained in details.
As for capital efficiency, Deri's contract has built-in leverage.
Q7: Can you give us Information about your pre-mining? How can I join and what are the benefits/Rewards?
Are you focusing only on Chinese market? If not can you explain us why you have only one local community (Chinese) channel in telegram? What about other Communities member?
Can you give us Information about your pre-mining? How can I join and what are the benefits/Rewards?
https://twitter.com/Nataile00709174/status/1365623436274372612?s=19
ANS: Premining is the program that Deri rolls out for the community to get familiar with Deri Protocol and its pool-based interactions. Also it attracts liquidity before the trading pool (for perpetual contracts) launches so that the latter will kick off with some amount of liquidity from the very first block.
We are expanding to many other communities. Which communities would you like to see
Currently we have a General, Chinese, Spanish, French and Japanese community
https://t.me/DeriProtocol_FR
https://t.me/DeriProtocolJP
Q8: DeFi platforms are not completely secure, so how will Deri Protocol mitigate the risk factors of defi and improve efficiency for users? Which Blockchain chains are currently running on Deri Protocol, how can you create aggregation for Deri to run on such multiple chains?
https://twitter.com/Jonhwick1821/status/1365572362767245314
ANS: assuming you were referring to the code security. Deri was designed and developed with very careful consideration on the security part. Plus it's thoroughly audited by PeckShield. feel free to check out the audit report (link on our frontpage).
Q9: What traction have you had since launch, any deals and partnerships?
https://twitter.com/BbnIrwan/status/1365615165899558914?s=19
ANS: We have a lot of partnerships/deals in the pipeline
Check out our tweets to have a better idea of our partners
https://twitter.com/deriprotocol/status/1364508059653918721?s=21
Q10: In your website i see about sushi,did you partnered with sushi,and do you have plan to do an Airdrop like 1inch do for uniswap users?
https://twitter.com/Manu26766844/status/1365626502394470401?s=20
ANS: Yes, we are in partnership with Sushi. Not just for business cooperation. We also discuss tech issues sometimes.
As for airdrop, premining is our way of "airdrop".
Q11: you have released mining DeriProtocol from smartphone? Does the percentage of mining revenue depend on smartphone specifications? Is there a minimum recruitment for mining DeriProtocol ?
https://twitter.com/BbnIrwan/status/1365618059537313792?s=19
ANS: Yes. It should not be in general. but since there are so many smartphones out there, i am 100% sure. plz let us know if your smartphone has an issue on this.
In terms of smartphone specs? not to my knowledge.
Q12: What is the meaning of "tokenizing the risk exposure into NFTs"? How does it works actually?
What NFT standard does DERI Protocol using? Is it ERC-721 or other?
https://twitter.com/Pamoeto/status/1365621095802433541?s=19
ANS: Meaning your position exists as an NFT. all the info of your position (direction, volume, entry price, margin, etc) are contained in the NFT.
Yes, it's ERC721, the de-facto standard of NFT.
Q13: How does Exchange Deri work differently from the ways other derivative exchanges work? Does the use of 3 Chain chains on my platform affect the time and cost of placing orders and executing orders from users?
https://twitter.com/johnxina1/status/1365583478314602496
ANS: This is explained in my article "The Road to DeFi Derivatives" on medium.
https://medium.com/@deri_protocol/the-road-to-defi-derivatives-a55c32fcbf1d
The gas consumptions and executing time of the 3 chains are different of course.
Q14: Why would you turn the risks of DeFi encoded in the NFT form to use as lego blocks, how does this help the three chains, one ecosystem? With the partnership with AutoFarm and Dforce, what are your expectations in the cross-chain productivity race with other platforms?
https://twitter.com/songa9281/status/1365589524798038019
ANS: Because NFT is the most proper form to represent derivative positions. This has nothing to do with "3 chains, 1 ecosystem" tho.
AutoFarm and dForce can bring a lot of TVL to Deri as well as other resources.
Q15: What is the value base and function of DERI Protocol? Is liquidity mining on DERI as risky as possible loss like on Uniswap, how will DERI Protocol have a mechanism to protect users that provide liquidity?
https://twitter.com/MartinL11135159/status/1365591153668624384
ANS: No, even tho mining in Deri trading pool is not riskless, it's risk is much smaller than that of Uniswap. This is because of the funding rate mechanism, arbitragers will come in to reduce the net position and thus protect the LPs. Plz refer to wp for the details.
That being said, the premining is completely riskless.
Q16: Safety is the first priority for Investors. I heard that Deri Protocol has been audited by Peckshield. Where can I see the test result?
https://twitter.com/Nafisiqbal55/status/1365621908616531976?s=19
ANS: https://github.com/peckshield/publications/blob/master/audit_reports/PeckShield-Audit-Report-Deri-v1.0.pdf
Q17: For $Deri holders what benefits will be received for long term. Do you offer any incentives for long term holders and any staking platform to join?
https://twitter.com/amaloversclub/status/1365303996135710721?s=19
ANS: plz refer to the governance token + fee token part. also we are developing something like Sushi's xSushi.
well i don't think BSC or HECO needs layer 2 for now. So layer 2 is pretty much for ETH only.
Q18: HELLO 👋 @im0xAlpha
You said Deri protocol is reasonably gas-economic. So can you explain more how much gas is consumed to do things with Deri? like what's the minimum gas consumption of a single transaction on ETH blockchain? Also why did you mentioned that the most expensive action is trade-with-margin? Can you give some suggestions on how to less the gas consumption?
https://twitter.com/Wormz28/status/1365615889593167873?s=20
ANS: good question.
the min gas consumption for simple operations is a bit over 100K gas.
trader-with-margin's gas consumption is around twice as the simple operation.
to save gas, we suggest you deposit enough margin and do trading (add/remove positions) without changing margin.
Q19: Is DERI only limited to crypto world? I mean is your target only Crypto enterprise? Or you will focus on real-world companies too?
https://twitter.com/ApaguJohan/status/1365619319879528452?s=19
ANS: Another good one.
No, Deri is not limited to crypto only.
It's capable of providing access to the traditional finance world, such as SP500, EURUSD, oil price, gold price, etc.
Q20: In the nearest future, Deri Protocol has a plan to launch its own exchange. But what type of trades do you intend to incorporate in this exchange?
https://twitter.com/Abiodunbbey/status/1365433539630690311?s=19
ANS: for the first step: perpetual
next: futures with expirations, options, etc
Q21:Token burn is benificial for any project...so my question is, Does DERI PROTOCOL TOKENS have any Coin Burn / BuyBack systems or any Token Burn plans to increase the value of tokens and attract investors to participate in investments???
https://twitter.com/MizuHasan/status/1365614444420603907?s=19
ANS: not yet.
Q22: To join a program that offers Deri finance projects, namely the premining & TVL competition, what are the requirements and benefits, and can you explain that your project is not a scam project and is good for long-term investment?
https://twitter.com/JinJrx/status/1365611521603112960?s=19
ANS: well, it's all open source, code verified through etherscan.io. You can check it out yourself.
Q23: How much leverage does Deri Protocol offer? Is there also liquidation? If so, did the ethereum fee take up at the time of liquidation?
https://twitter.com/rich_hardx/status/1365627518363967494?s=20
ANS: The first batch of trading pools will have 10x leverage.
Yes, there is liquidation.
Yes, and that is why we need liquidators in the Deri ecosystem to help liquidation.
Q24: What are our advantages in joining the TVL competition, will we get an award? then we will be appointed ambassadors?
https://twitter.com/Ciknung3/status/1365624680485330946?s=19
ANS: Yes, you would get award if the pool reaches TVL target. The BAC pool already got their award: 1.5M DERI!
Q25: Deri Protocol aims to bring the derivatives trading to DeFi, and NFTs seem to have an important role in achiving this goal, how will you use NFTs as derivatives, what will determine their supply? How will it be related with the actual derivatives current supply and demand?
https://twitter.com/Rosanela08/status/1365474521197785088?s=19
ANS: NFT is used to represent traders' positions. An NFT is minted when you place order.
Q26: Can you explain the long and short on the Deri Protocol platform? Is it like CEX in general? Why did the exchange from Deri use eth when currently the gas fee is expensive?
https://twitter.com/rich_hardx/status/1365627557991702533?s=20
ANS: Yes, it's like the CEX in general.
It's actually deployed on 3 chains: ETH/BSC/HECO. The other two are pretty gas-economic.
CONCLUSION:
WOW, those are quite some great questions!
That's a lot of high-quality communications here. I will encourage you guys go and try out Deri, for mining and trading. that's the best way of knowing the project.
Follow Us On Our Various Social Media Communities For More Update;
Website: https://deri.finance/
Twitter: https://mobile.twitter.com/deriprotocol
Medium: https://medium.com/@deri_protocol
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