There is a reason why crypto needs a mature derivatives market. Indeed, regulators, especially in the U.S., have their reservations on crypto. They cite manipulation concerns, the absence of robust monitoring tools, which allows the sphere to be a manipulator’s playing field.
However, as the ecosystem matures and crypto evolves to be with protective systems covering end-user interests, more products like Futures, ETFs, or ETPs and many more, will be made available for trading at traditional bourses.
Inevitably, that would mean higher liquidity with acceptance, specifically triggering the next wave of demand for crypto from funds across the globe.
There are efforts to actualize this. With tireless applicants, unfazed by the U.S. SEC’s endlessly rejecting their quest to offer a Bitcoin ETF, hope could be found in other tangential products like Bitcoin Futures by the CFTC and ETPs of several crypto assets in other jurisdictions like Switzerland.
Outside the U.S., Brazil is opening up its market for crypto investment after approving Bitcoin and Ethereum ETFs.
Still, all these efforts are off-chain.
Fewer solutions, nonetheless, exceed relying primarily on the blockchain for price discovery and subsequent settlement.
Until recently, Oiler came up with what they described as a “Blockchain native Derivatives” platform.
The platform will fully leverage blockchain’s properties. All of its data and operation mechanics are on-chain. It means pricing and settlement are also live on the blockchain, executed straight on Ethereum.
However, a truly “on-chain derivatives platform” until off-chain oracles became a thing. Products like stablecoins, for example, DAI by Maker, and the rise of AMMs allowing for decentralized price discovery eliminating third-parties are good examples as oracles played a critical linking part.
Binary Options on Ethereum’s Attributes
Oiler’s binary options are on Ethereum’s parameters like hash rate (a measure of computing power), block times, Gas prices, block Gas limits, and more, provided Oiler’s smart contracts can access them.
There are some blockchain parameters currently accessible for Oiler. Others would be after the London hard fork—via EIP-1559—and activation of EIP-2935—expanding their binary options offerings with even stronger settlement times.
For what it is, the Oiler platform is an on-chain exchange for trading digital or cash-or-nothing options of blockchain attributes such as Gas or blockchain hash rate.
There is also a choice of further trading minted options at AMM pools at the spot rate. Within its systems, options can either expire at 1 or 0 USDC. Meanwhile, prices can strictly move between 0 and 1, enabling the protocol to exercise all options for all users at once, saving on Gas.
Minters of Oiler options can sell via Uniswap while exposing themselves to impermanent loss. However, in these pools, users can buy and sell written options for USDC.
Accordingly, using Oiler’s rails, users—including blockchain institutions, wallet operators, and exchanges– would be able to cushion themselves against wider network shocks by hedging. Risks could be widely fluctuating Ga– like it did happen in April through to Mid-May, or hash rate as miners enter and exit.
Oiler Binary Options Details
Presently, Oiler allows the trading of several options following Block Difficulty (tracking hash rate), Block Gas Limit (tracking the overall Ethereum capacity), block times (tracking hash rate and “Ice Age”), and soon, once EIP-1559 goes live, BASEFEE. These options would be collateralized using USDC, a stablecoin used in previously deployed options.
Each option locks in 1 USDC, which is paid to the holder when exercised only once (withdrawable by the option holder) when the strike level is reached—or returned to the writer if the Option expires—that is, the stablecoin is withdrawable to the writer. In all active Options, the collateral will remain locked. Also, as mentioned earlier, all options are exercised only once, making the Option inactive.
Like in other Options trading portals, the buyer of an option will always pay a premium—payable in USDC– to hold—subsequently hedging. The premium will be the spot rate of the Option should it be traded in an AMM.
In the traditional sense, Options give the holder a right (not an obligation) to buy or sell the underlying asset at the strike price before the expiry date.
This will be the guiding premise in Oiler. However, traders must pay attention and note that the underlying asset, in this case, hash rate or Gas, are not tradeable. A trader won’t buy or sell mining difficulty. Nonetheless, they can continue tracking this parameter as it could be directly affecting their operations.
Each of the above trackable blockchain parameters used to create on-chain executable Put or Call options are publicly accessible. For instance, mining difficulty and block Gas limit could be affected by similar or different factors, mainly revolving around network capacity and, in some cases, decisions taken by developers.
The team was unveiled in May 2021.
They comprise experienced individuals from finance, tech, and marketing.
Together, Oiler is built by experts with unparalleled knowledge in DeFi, Ethereum development, Layer-2, and engineering.
- Tomasz Kajetan Stańczak is the founder. He actively contributes to the Ethereum core.
- Victor Naumik is the CTO and the lead smart contract engineer.
- Antonio Sabado heads partnerships and communities.
- Grégoire le Jeune is the head of growth and spearheads the project’s integration efforts.
Crucially, Oiler has massive support from Nethermind, guiding in building and research and development (R&D).
Oiler (OIL) Tokenomics, Market Performance, and ROI
The governance token of Oiler is OIL, compliant with the ERC-20 standard.
Overly, there is a total supply of 100 million OIL.
In a completely decentralized system, OIL gives holders the power to decide how the project develops.
OIL distribution is as follows:
- 36.8 percent to the Foundation
- 20 percent to the ecosystem
- 12.5 percent to the team
- 10 percent to liquidity
- Seven percent to advisors
- 2.8 percent to the private sale
During the Liquidity Bootstrapping Pool (LBP) event at Balancer, Oiler dispensed 1.775 million OIL tokens each at $0.75 for USDC.
However, at present, the team has raised a total of $ 439,599, funds generated from the seed fund. During this funding round, each token was sold at $0.07.
According to Etherscan, there are 2,243, as of writing, who have generated over 10.1k transfers.
As per coin trackers, there are 9,763,500 OIL tokens in circulation, each trading at $1.62, giving the project a market cap of above $15.8 million.
At current valuation, investors who bought the token during the LBP are up 2X—down from 4X when OIL rose to an all-time high.
Meanwhile, seed fund investors are up a cool 23X at spot rates.
Uniswap is where traders can quickly acquire OIL without high slippage.
Oiler (OIL) Short-Term Catalysts
- Ethereum is worth over $200 billion, while OIL has a market cap of just $15.8 million. OIL is based on options of the ledger’s parameters. With more enhancements and EIP activation, Oiler will release more Options, supporting OIL prices.
- OIL is only available for trading at Uniswap. As the project finds prominence, more exchanges—like Binance—could list the token, increasing prices.
- Seed Fund and Public sale investors are deep in green despite the sharp decline of crypto prices with 43X and 2X, respectively. This is enough evidence of the value assigned to Oiler.
- The team is experienced. Furthermore, with support—advisory and R&D—from Nethermind, users should expect more products.
- Additionally, the Oiler development team continues to build and is currently in beta. The Hash Rate (mining difficulty) binary options are already available as Alpha and on mainnet, being tested by the community.
- Moreover, as Ethereum continues to be enhanced through the activation of various EIPs, Oiler will expand their offering. EIP-1559, which went live on Aug 4, allowed for BASEFEE-reliant binary options.
Oiler (OIL) Long-Term Catalysts
- Oiler continues to build relationships and partnerships to improve the user experience further. It has now integrated into Polygon, running a sidechain, slashing down Gas fees, and encouraging more participation.
- Most importantly, Oiler smart contracts are safe and audited. It passed Germany’s Chainsulting security tests.
- Oiler Drilling Expedition allowing staking of Uniswap’s LP token is ongoing. In all, 500k OIL governance tokens will be harvested for participants. The longer the staking period of LP tokens, the stronger the extractive power. Thus far, over $2.45 million of USDC are locked, a net positive for OIL tokens.
- Oiler offers a unique product enabling binary options trading of Ethereum’s parameters while also supporting trading of the same tokens via Uniswap’s liquidity pool. It is a big selling point guaranteed to drive OIL prices once Oiler launches on the mainnet.