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Explaining a DeOrder
The core functionality of the DeOrderBook protocol
DeOrders are to users, a limit order. However, behind the scenes they work as a minimal-risk way to sell calls or puts. They work similarly to CeFi warrants.
To make a DeOrder, users can choose a strike price, as well as select a stated amount of
$bSNIPERto buy at that price. They then select an expiration date for their order, upon which they will be quoted an expected APR. Making a DeOrder results in entering a pool, of which each has a unique combination of strike prices and maturity dates that is reflected in the naming of each pool. As in a CeFi warrant, being invested into a pool gives users the obligation to buy or sell cryptocurrencies once they have reached specific values. DeOrders continue accruing
$DOBrewards as they age towards the maturity date. Users obviously profit the most from having their DeOrders go 'in the money'. Yet, even if the DeOrder does not end up 'in the money', users are able to receive back the majority of the original collateral they put into the DeOrder, less a 0.2% fee.
Pools are named using the below three-part convention.
The date value changes every Friday.
This represents how far the strike price of the DeOrder is from the reference price, with Deluxe being the nearest and Supreme being the farthest.
Bull pools are for 'buy' orders, while Bear pools are for 'sell' orders.
At launch, DeOrderBook will have 18 staking pools, all with no fixed lock-in period to offer users maximum flexibility.
Once a user places a DeOrder, their HODL tokens are automatically sent into the selected pool. In addition, the related SNIPER and BULLET tokens are automatically minted. Each of these tokens will be uniquely encoded with the strike price and maturity of the selected pool that has been entered.
The SNIPER tokens generated by the DeOrder will be kept in the wallet of the user who placed the DeOrder. These can be used to unwind the DeOrder if the user wants their collateral back early. BULLET tokens The BULLET tokens generated by the DeOrder are sent to the DeOrderBook Treasury. 20% of these are retained by the Treasury as fees, while the other 80% are distributed to eligible DOB lockers as rewards via a daily BULLET raffle.
DeOrders can be unwound using the SNIPER tokens generated at the time of placing the DeOrder, and the matching BULLET tokens.
No, DeOrders have no minimum lock-in period and can be unwound at any time as long as the users holds the required BULLET tokens and an amount of HODL tokens matching the strike price.
User-selected strike prices and expiry dates are an integral upcoming part of the DeOrderBook development roadmap.