Efficiency & Price

The incumbent derivatives market suffers from a large amount of friction. It requires middlemen to provide access to the market, facilitate trades, and lower counter party risk. This inefficiency creates costs that get passed on to investors. By facilitating derivatives on Stellar's decentralized network, OptionBlox eliminates the need for these middlemen.

A comparison between Stellar-based derivative fees and traditional derivative fees. Central-clearing-party revenue-per-contract is used to measure costs that get passed to derivative users.

Ecosystem Fees Associated with Stellar-Based Derivatives

Options:
$0.000261

Futures:
$0.000319

Swaps:
$0.000423

Derivatives:
0.000029

Ecosystem Fees Associated with Traditional Derivatives

CBOE Options:
$0.235

CBOE Futures:
$1.759

CME Average: $0.725

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Accessibility

OptionBlox increases market accessibility. Potential derivative users struggle to participate in derivative markets unless they live in developed nations. The decentralized nature of our system means our service is accessible to anyone with an internet connection. This accessibility creates open-access derivative markets. Not only do open-access markets improve global economic equality and development, they also tighten market spreads and drive stronger volume.

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Trust

Information on a decentralized ledger like Stellar's is “trust-free;” it cannot be faked, hidden, or misrepresented. This gives users total certainty of the conditions surrounding their derivatives and the issuers of these derivatives. In addition, we use a variety of Stellar's features such as Pre-Authorized transactions, Time-Bound transactions, and Necessary Funds, to ensure that there is no potential for users to act maliciously on our platform. This minimizes the risk of default for participants.

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Asset Tokens

Writing a derivative with OptionBlox generates a custom asset/token. This token is required to exercise the derivative, effectively serving as its "key." The token represents ownership of the contract and is used to trade the contract. Because the token is a ledger-based asset, it can be traded on any cryptocurrency exchange and can even be stored offline.

Stellar's multi-asset Anchor solution allows users to tokenize any assist on the stellar ledger. We use this to enable OBX users to write derivatives with any underlying asset.

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Distributed Ledger Technology

Decentralized networks are accessible to anyone with an internet connection. They are run by a network of nodes situated all over the globe which have no governing body. Any individual can connect to the network or become one of the nodes. In addition, Stellar’s decentralized exchange, where these assets could be traded, operates on this network. Therefore, anyone with an internet connection can write, buy, and trade derivatives on our platform.

Stellar’s Anchor system enables parties to represent any asset on our network. Our network supports all reputable anchors and thus can support derivatives involving any asset.

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Wallet Partnerships

To maximize security and ease-of-use we plan on allowing users to sign transactions with their wallet accounts in the wallet application. We are currently searching for wallets to integrate with.

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Exchange Partnerships

We are looking for exchanges to partner with. We want to list our standardized derivatives on traditional exchanges. In addition, we want to allow users to sign transactions with their exchange accounts to improve security.To maximize security and ease-of-use we plan on allowing users to sign transactions with their wallet accounts in the wallet application. We are currently searching for wallets to integrate with.

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Market-Maker Partnerships

Market-maker partnerships are crucial for us. We need them to both create derivative volume, and to participate in our liquidity provider program. Under this program, market makers would enter derivative contracts when a party's margin balance falls below the liquidation level. As compensation, the market maker will receive that parties remaining margin balance. With sufficient network speed, market makers will receive a premium whenever they enter a contract. To maximize security and ease-of-use we plan on allowing users to sign transactions with their wallet accounts in the wallet application. We are currently searching for wallets to integrate with.

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Fundraising

We are currently searching for seed funding. We want to expand our operation and require capital for technology and human capital costs

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Human Capital

We are trying to expand our team in a variety of areas!

In addition, we are hoping to create an advisory board to help guide the project.

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