Dopex.io x Satoshi Club AMA Recap from 16th of June

Hello, Satoshi clubbers! Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from Dopex.io and our guest was @tztokchad and @witherblock – representatives of Dopex.io. The AMA took place on 16th of June.

The total reward pool was 500$ and has been split into 3 parts.

In this AMA Recap, we will try to summarise the most interesting points for you.

Part 1 — introduction and questions from the Website

Gold Rocket | Satoshi Club:
Hello, dear Satoshi Club community! We are pleased to announce AMA with Dopex.

Paul Mont | Satoshi Club:
Today’s guests are @tztokchad @witherblock! Welcome! 😁

tz:
Hey, glad to be here.

witherblock:
Hello!

Gold Rocket | Satoshi Club:
Hello and welcome to Satoshi Club, @tztokchad @witherblock!😊

Paul Mont | Satoshi Club:
It’s a great pleasure to have you here at Satoshi Club 😁

How’s your day going? 🙂

tz:
Thank you, likewise

It’s going good, been looking forward to the AMA today.

Gold Rocket | Satoshi Club:
We are also very excited about the upcoming AMA.😊

Paul Mont | Satoshi Club:
I feel I can speak for the whole Satoshi Community when I write that we’re all eager to know more about Dopex 🔥

Gold Rocket | Satoshi Club:
Yes! Let’s start!
Introduce yourself please. How did you get to be involved in crypto & Dopex? Tell us please about your position in Dopex?

tz:
That’s awesome, we’re here to help you learn more about the project

Dopex*

Gold Rocket | Satoshi Club:
Dopex. By the way, what does that mean?

tz:
I’m the founder of dopex and have been building it over a few iterations internally for a couple of years originally. I’ve been in the crypto space since late 2016 as a dev and investor. I did get exposure to bitcoin initially in 2012 though

Gold Rocket | Satoshi Club:
😉Tell us about the history of Dopex

tz:
Dopex is an acronym for Decentralized Options Exchange

witherblock:
I’m witherblock: the lead dev at Dopex. Got involved in crypto a couple of years back thanks to @tztokchad and then Dopex again thanks to @tztokchad.

Gold Rocket | Satoshi Club:
This is a very original concept.👍

What is the essence of Dopex?

Paul Mont | Satoshi Club:
So you guys knew each other well before joining forces for the Dopex project. Did you know each other in real life as well?

tz:
I started building it a couple of years ago and it’s gone through 3 iterations until now. The current one internally is technically a v3. V1 would have been more comparable to opyn, while v2 to hegic. V3 was a product of learning the drawbacks of the previous models and building a solution that attempts to nullify those issues and most importantly create a fair pricing model which’s technically a complex problem that doesnt have a one size fits all solution even in the tradfi world

Gold Rocket | Satoshi Club:
This is a hard-won and beloved child 😉

tz:
@witherblock came on board for v3 and has been doing the bulk of the development and we have been figuring out the architecture together to deliver a platform that accounts for fair pricing, fast transactions, minimized losses for liquidity providers via our rebate token mechanism, composability and a few other features that you could read up in our docs @ https://docs.dopex.io

Gold Rocket | Satoshi Club:
What plans do you have for the future? And what can we expect from Dopex?

witherblock:
Yeah, sort of.

tz:
Yes, there’s been a lot of thought that’s gone into it – not just with the team, but with our early investors and delegates as well, such as tetranode, defigod, orthogonal trading etc

You could see the full list on our page @ https://dopex.io

Paul Mont | Satoshi Club:
It’s quite apparent you’ve tried to holistically build a unique platform, also drawing on some of the most renowned protocols in the crypto space.

At the same time, trying to build something that’s one-of-a-kind in its concept/vision.

Gold Rocket | Satoshi Club:
Also we would like to know about your team. Who is on the project team core?

tz:
It aims to solve all the drawbacks with options protocols and get a significant chunk of the flow deribit and tradeparadigm have at the moment. They do over 80% of all crypto options volume and have found product market fit. Our goal is to build a platform that allows option liquidity providers to minimize their losses in weeks of high volatility and purchasers to get the best deal possible. All in a game theoretical manner powered by our token incentives

Yes, that’s true. We wouldn’t spend such a large amount of time iterating on it if that werent the case.

Paul Mont | Satoshi Club:
Brilliant, thank you very much for the thorough introduction 🔥

tz:
In the core dev team, we have 5 developers,

witherblock
psytama
gg
cryptoguru and
me

We are all full stack devs with considerable experience in solidity

We are always looking for good developers however and if you’re interested, please dm me on twitter @tztokchad. We pay well.

Paul Mont | Satoshi Club:
This is a great opportunity Satoshi Club 🔥

Gold Rocket | Satoshi Club:
Satoshi Clubbers! do not miss the opportunity to be realized in a good project🚀

Is your team anonymous? If so, do you ever plan to go public?

tz:
Alongside the devs we also are partners with DCV, DefiChadVentures who are a group with experienced and respected members within the defi community for help and technical advice

We are anonymous and dont have plans to go public considering derivatives are a tricky topic with regulations

witherblock:
We also have.

ohic
polymmo

For our beautiful designs and

mariodigital_io
xenes1s
0x_bella
CorporealFeast
liquideshun

For our community!

Gold Rocket | Satoshi Club:
Thanks for the answer. Another small question from me personally 😁

What event influenced the project the most?

Yes, I also wanted to notice the designer’s work was done at the highest level 👍

Paul Mont | Satoshi Club:
I concur, I also truly enjoyed the website concept 👏👏

tz:
Actually trading on deribit and being frustrated with liquidity, margin requirements, kyc and the platform being down at times of high volatility. And after that it would be the current option dex ecosystem not being liquid enough yet. I think there’s space for more than one platform right now, but that might change quickly in the future if one does find product market fit

👆 Thats a reply to this question

Gold Rocket | Satoshi Club:
@tztokchad @witherblock Thanks for the introduction, we will have a question selected for the Part 1. ready to start?

Gotcha 😀

tz:
Sure.

witherblock:
Fire away.

Q1 from Telegram user @Johana0012
The Dopex token sale is June 21st. Interested participants will deposit ETH into the token sale contract at any time during a 3-day period and will receive DPX in return. How can I minimize my risks using the Dopex protocol? How can I earn Dopex? How many tokens do you currently have available in your protocol? What is the double model that Dopex presents? What is the function of each of the tokens?

Paul Mont | Satoshi Club:
A question that actually tackles many fronts 🙂

tz:
Dopex has a unique 2 token model. We have a governance token, DPX and a rebate token, rDPX. The rebate token is issued after weekly/monthly “epochs” in option pools, only if pool liquidity providers end the epoch with a net loss. They are issued at a % of the loss, this rebate % is determined by governance – which means that you would need dpx to vote on changes on this. DPX would have a total supply of 500k while rDPX doesnt have supply cap, however initially rDPX would most likely be more scarce than DPX until the platform is live

Is that clear or do we need to elaborate further?

Gold Rocket | Satoshi Club:
By the way, can you please share with us the Dopex tokenomics?

It seems to me that this is enough, because the next question continues this topic.

witherblock:
It’s a bit difficult to explain here in one reply so I’ll leave the detailed page explaining everything about the tokenomics – https://docs.dopex.io/tokenomics

Paul Mont | Satoshi Club:
So rDPX is distributed after users have incurred a loss. What are the starting issuing percentages?

tz:
Initially, its 30%. But that would be updated based on how it performs in prod, using governance votes if necessary

Gold Rocket | Satoshi Club:
Thanks for sharing ☺️

Paul Mont | Satoshi Club:
Also at which time intervals/epochs do these distributions occur?

Are the epochs also a governance topic on which DPX holders can cast their vote on?

witherblock:
We have weekly and monthly pools at the moment so the distributions occur at the end of every week for the weekly pools and at the end of every month in the monthly pools.

tz:
Initially no, they will be weekly and monthly. Over time, we will introduce quarterly pools and possibly yearly. That would require governance votes to allocate dpx incentives to liquidity providers.

Paul Mont | Satoshi Club:
Thank you very much for the clear answers guys, I’m pretty sure @Johana0012 will be satisfied by your replies 😉

Paul Mont | Satoshi Club:
Let’s hop onto the next question, shall we?

tz:
Sure.

Q2 from Telegram User @andrey_seleznov
Hi Dopex!
As partially explained in the previous question I would like to enquire more about Dopex’s dual token model. I read that Dopex plans to use DPX as the limited supply governance token that accrues fees and revenue from pools, vaults and wrappers. And rDPX as the rebate token for options writers that can be used to mint synthetic assets such as indices, stocks etc. Why did you decide to go with a more complex dual token model? What benefits does it bring compared to a single token model used by some exchanges? Thank you!

tz:
We always wanted to have rebates for liquidity providers considering the tail risk with writing options. One week in a year could technically wipe a large % of gains for writers, a 30% rebate could result in over a 50% increase in pnl based on the last backtests that we had done.

So initially dpx was going to be the rebate token as well, however we decided to change it based on advice from defigod and tetranode considering nobody would want to hold an asset without a supply cap and use it for governance at the same time considering it would lead to long term scalability issues and unpredictability at a protocol level

With the 2 token model we were able to separate both the functions and simplify our governance and fee collection into one token, while having the other for purely rebates, synth and margin collateral, liquidity mining and more features in the future

Paul Mont | Satoshi Club:
The pros of a strategic decision like this one is palpable. It just feels right, your explanation is a logical and brilliant one. Thank you very much 👍

Gold Rocket | Satoshi Club:
it really makes sense

tz:
Thank you.

Gold Rocket | Satoshi Club:
Can we proceed. Or you want to add something?

tz:
We can proceed.

Q3 from Telegram user @JonahApagu
Dopex is said to be implementing an innovative and state-of-the-art option pricing model that replicates volatility smiles. And of the benefits of this model is that users get to minimize their losses and maximize gains.. so how does this option pricing model work, what features does it have. How is this model of yours a fair pricing model… and how is this different or unique from the pricing models used in traditional Options platforms.

tz:
We have a plug and play pricing model that can change per pool. Initially we had decided to go with a closed form formula that would utillize only rv. Eventually, based on advice from orthogonal trading, we switched to a delegate model – where dopex has 5 delegates quoting on multipliers for each option pricing model to come up with a fair price. The delegates are initially 5 trading firms that do billions of dollars in options volume every quarter. They are incentivized to quote fair pricing every second since it would increase TVL in dopex which consequently results in a better dpx price and larger liquidity allowing them to use dopex option pools in the long run as their main source of liquidity.

Initially we would use the SVI model to replicate volatility surfaces for btc and eth using deribit’s option chain as a baseline. However for defi blue chips and other highly liquid alts with no option chain at the moment we would use other formulas that would result in fair pricing – it will be trial and error initially, however liquidity providers would be incentivized with dpx to ensure they make a good return

Gold Rocket | Satoshi Club:
Sufficiently comprehensive answer! Thank you so much!

tz:
Our goal is always to enable retail to add safe liquidity while offering pros that liquidity to arb, create positions etc.

No problem

Paul Mont | Satoshi Club:
Yes, it seems a win-win solution, that works in the direction of fair pricing, with positive spill-overs for all stakeholders involved.

Thanks again, questions number 4 incoming 🙂 Ready?

tz:
Yes.

Q4 from Telegram user @pixma00
Underwriters of Dopex group options are regularly exposed to the risk of accumulated losses during periods of extreme volatility. To subvert this risk, what protection strategy is Dopex applying so that its investors are not so affected by market volatility? What is the refund mechanism? How are option writers compensated? What is the strategy applied to generate passive income to generate options issues?

Paul Mont | Satoshi Club:
This has been partially answered earlier when we touched upon the dual token model, but maybe you can add more details to address with even more depth @pixma00’s question 🙂

tz:
We have covered this in the previous answers, but it would be the rebate token being issued at a % of losses after every epoch. The rebate % would vary based on risk factors for each pool. This % would also be updatable via governance, leaving a need for larger stake holders to always keep their dpx for this purpose.

The strategy for passive income is simply locking your base/quote assets in a dopex option pool initially. It auto rolls over your assets at the end of an epoch to the next one allowing liquidity providers to never need to manually adjust positions unless required

witherblock:
Also to add to this option writers receive DPX emissions every epoch.

This is part of the 30% (of the total supply of DPX) allocated to platform rewards

Paul Mont | Satoshi Club:
So there are rebates (rDPX) and rewards. What about Call and Action rewards? Could you please spend a word to describe the difference between the two?

tz:
Yes, all liquidity providers receive this as an incentive at the end of every epoch. I didn’t mention this in the original post

Call rewards are static rewards distributed to users (bots) who call certain functions on our contracts.

Action rewards are distributed as liquidity incentives for liquidity providers/option writers

Paul Mont | Satoshi Club:
Thank you very much, I felt it was significant to make the distinction. Great answers!

Gold Rocket | Satoshi Club:
great answers! Thank you😊

tz:
No problem.

Paul Mont | Satoshi Club:
Next question’s topic is about Dopex’s architecture.

Q5 from Telegram User @victorogb
The Dopex protocol makes use of a combination of several existing protocols within it’s architecture. The notable ones are those of the Uniswap, Chainlink and UMA protocols. These protocols are deployed to serve specific purposes within the Dopex architecture. Consequently, why would Dopex choose to combine these different protocols, what are the specific functions of the listed protocol types within the Dopex architecture, and how does a combination of the different protocol models affect the general operations and function of it’s options pool?

witherblock:
We use uniswap to roll over premiums collected from option purchases and re-add liquidity into the option pools.

Chainlink is used for pricing oracles as we need futures pricing for an asset to accurately calculate the option price for it.

UMA is used to generate synths from rDPX.

Our platform is designed to be interoperable with other protocols in order for future extensibility and an innovative roadmap we have ahead of us.

Paul Mont | Satoshi Club:
After the June 21st sale event, what is coming next in your roadmap? What would you deem the most important event to come for Dopex in this 2021?

tz:
The roadmap post public sale is

  • liquidity mining/farming
  • private L2 testnet
  • public L2 testnet
  • mainnet l2 launch

Thats our immediate roadmap post sale. Apart from that we have quite a few app layer additions in mind on top of the base protocol which would be built in-house and by community members incentivized by bounties. So if you’re a freelance dev looking to contribute and get paid, join us on discord @ https://discord.gg/dopex to keep up to date with them.

Some of the future roadmap includes:

  • Liquidity pools, allowing users to sell option tokens at any time into pooled liquidity
  • Protected stablecoins with curve metapools
  • Quarterly options
  • Leveraged options trading with usd and cross collateral
  • Synthetic Futures positions with leverage
  • Synthetic assets
  • Volatility arbitrage vaults

I’m personally excited about perpetually protected stablecoins using dopex put options with curve metapools for liquidity considering it could add 9+ figures in tvl to dopex while offering a product thats definitely needed in the space. Of course, LPs would be incentivised with rewards as usual

Paul Mont | Satoshi Club:
Great, great! Thank you very much!

Now, this is the last question for this very first part of the AMA, then we’re heading into the LIVE part of the session 🔥

Gold Rocket | Satoshi Club:
We understand your delight 😉

Gold Rocket | Satoshi Club:
Thanks for your great answers.

tz:
No problem.

Q6 from Telegram User @Einsteinyl
I understand that Dopex Essentials Series will guide people through everything we need to know to begin trading options on Dopex. But my question is there are 2 option “Call Option” And second is “Put Option”, could you introduce to us what are these option and how do they work inside your platform?

tz:
@witherblock is answering that question, meanwhile, make sure you follow us on Twitter for updates:

@tztokchad
@witherblock

Paul Mont | Satoshi Club:
Satoshi Clubbers, please follow to stay in the know about anything Dopex 😉

witherblock:
To put it in simple words, a call option is when you are betting for the asset where in you will make money if the asset goes higher in price as compared to the strike price you bought at. A put option is the opposite where in you bet against the asset and make money if the assets price drops under the strike price you bought at.

On Dopex you can write either options by depositing into the respective pools. For eg; Writing ETH call options you would deposit the ETH into the pool as collateral and writing ETH put options you would deposit USDT into the pool as collateral.

Gold Rocket | Satoshi Club:
✅ Done

Paul Mont | Satoshi Club:
These are terms that come from traditional finance, again some lingo that’s been passed onto crypto and DeFi as well 🙂

Thank you very much guys!

You’ve been outstanding so far! 😉

It has been a great time and now we must proceed to interact with our dear users into the live segment.

witherblock:
To add to this, this article should help a ton https://blog.dopex.io/dopex-essentials-calls-and-puts-cc0abc58dd36

tz:
Thank you!!!

Part 2 — live questions from the Telegram community

Q1 from Telegram user @Ratash97
What kind of Discount options DOPEX offer ?

witherblock:
We offer all options at a discount of 5% (this can be changed in the future by governance) if the options are bought using the volume pool. The volume pool is a simple pool where users can deposit USDT which then can be used to purchase options at a discounted rate. This pool is used to incentivise purchasing.

Q2 from Telegram user @bestQ420
Almost 80% investors have just focused on price of token in short term instead of understanding the real value of the project. Can you tell us on motivations and benefits for investors to hold your token in long term?

tz:
Our long term goal is to build TVL and our share of options volume over the coming years with the combination of phased rollouts and having our delegates slowly route their flow from centralized exchanges and otc to dopex.

If you feel confident in us, you could always aim to keep a % portion of dpx tokens. If we’re launching at a $50m circulating market cap and you believe based on our delivery that we would capture a larger share of the options market and cross a $1b cap, you could aim for 0.1% of the dpx total supply for example always and LP that portion while diversifying the yield away if you cross your 0.1% target.

This would give you a 20x return on your initial investment if we do cross a 1b cap while you also collect yield.

Q3 from Telegram user @Sumione
Why you have choosen for an ETH blockchain which has very high fees? is there any plan to launch on BSC so that I can join I prefer low fees.

witherblock:
Our core options protocol will launch on L2 Arbitrum and hence fees will remain extremely low!

Q4 from Telegram user @Eminet001
STAKING is a really great STRATEGY for getting more investors and users.
CAN USERS STAKE your token.??

tz:
Yes we will have staking and liquidity mining rewards starting from the 24th of June – 6pm gmt, 72 hours after the public sale has begun. Users will receive DPX and rDPX with boosted rewards in the first 4 weeks.

Q5 from Telegram user @Ishan1_7
You stated that your project was private; could you please explain briefly to the community why you do not intend to make it public?

tz:
The project isn’t private, it’s public. Our github repositories are however not public yet and will be open sourced prior to mainnet launch.

Q6 from Telegram user @nadee5
Most interesting feature I found in DOPEX is “OPTION SWAPPING” ,..

Can you please simply explain,
How does DOPEX OPTION SWAPPING work ?
are there specific requirements to use this feature ?

tz:
Option swapping is a unique feature to dopex and allows users with in the money (profitable) options to swap their options to a different set of strikes/expiries in a single transaction.

This benefits users since in deribit or other protocol it requires multiple steps and you would lose money in each step because of the bid/ask spread

Q7 from Telegram user @highpee
Will it be right to say that liquidity providers/option writers on Dopex are entitled to both Rebate reward and call reward? And for the call reward given to bot, I don’t seem to understand what you refer to as bots. What are bots and why do they deserve reward?

tz:
Smart contracts in essence cannot pull data to itself and requires an account to push data to it by calling functions. This ideally would require a bot/script to do it and we incentivize them with a reward for their effort.

Q8 from Telegram user @mctrho
Dopex has numerous protocols that are carried out through smart contracts, therefore I would like to know about the security that these contracts have. Have you carried out security audits of smart contracts and reveal serious vulnerabilities in accordance with the best practices of the smart contract industry?

witherblock:
We worked through several iterations of security checks and refactoring to ensure our code remains vulnerability free and as efficient as possible.

We have gone through 2 official security audits performed by 2 established audit firms. These audit reports will be made public soon.
The firms are:
https://solidity.finance/
https://solidified.io/

Q9 from Telegram user @NataliyaKil
The Dopex Token Public Sale will start on the 21st of June! Total of 75,000 DPX (15% of total supply) will be available in exchange for ETH via the deposit contract. The sale will end on June 24, 2021. So, what time does the Dopex Public Sale start and how can we take part in it, where can we find the deposit agreement you mentioned? Why did you choose ETH to buy DPX, and not some other currency? What are the restrictions for participation in the Public Sale: minimum and maximum for a purchase? And there are conditions under which the public sale of the model will end ahead of schedule?

tz:
The sale will start on 6pm gmt, the deposit agreement can be found ont https://dopex.io/sale

We chose eth since its the base currency for all defi and allows us to be more flexible with treasury management, setting up liquidity mining etc.

Restrictions are: you cannot be from the US or the OFAC sanctioned countries list.

The public sale has no limits but a headstart for whitelisted OGs from the dopex discord with a $5k limit.

The sale will end after 72 hours regardless of hitting the sale cap

Q10 from Telegram user @potentialsake
Why rDPX don’t have any supply cap and have infinite supply Won’t that cause inflation?

tz:
Because technically it depends on variables that are impossible to predict beforehand, however we add deflationary mechanisms during fee collection as well as ways to use and lock rdpx to give it intrinsic value.

Also this gives dpx stakeholders a massive incentive in terms of adjusting the rebate % in each pool to ensure supply is always in check while giving distributed rdpx an immediate use case as collateral or to LP and receive incentive rewards

Part 3 – Quiz Results

In the final part, we tested your knowledge in terms of Dopex.io. They’ve prepared 4 questions for this part. The total reward pool for the quiz was 300$.
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