[#2] Introducing Strategies — Oddz Options v2
To understand strategies in Oddz options v2, you must first understand how liquidity pools functioned in Oddz options v1. Since there are some parallels between liquidity pools in option v1 and strategies in option v2, we recommend that you first read our liquidity pools guide before attempting to comprehend strategies.
So, What’s the Difference Between Liquidity Pools and Strategies?
Strategies are a wrapper around liquidity pools to manage their liquidity easily and measure user strategy decisions individually without the need for external book-keeping. Although the idea is the same, the number of pools in strategy can vary from one pool to a maximum of 10 Pools. Simply put, liquidity pool (Oddz v1) was where users provided liquidity to one single pool and strategy is where users can provide liquidity to a maximum of 10 pools.
It provides option writers with the flexibility to provide liquidity to one or more pools at one go. They can also create their own strategy of pools and the proportion of the liquidity(shares) to be distributed to the pools. This way they can be option writers to various option types based on market sentiment. The profit in the strategy is aggregated from all the pools in the strategy.
Here’s an image displaying how you can provide liquidity to a max of ten different pools along with the allocation percentage for each pool:
The above image clearly depicts $100,000 worth of liquidity being distributed to 10 different pools with a 10% ($10,000) allocation into each pool and this whole distribution is called one strategy. Now, if you want to invest in this strategy you can do so by heading over to the strategies tab in Oddz.
What else Strategies can do?
Strategies will also allow option writers to provide liquidity to the high-performing strategies. One can assess the performance of the strategy by looking at last week’s PnL. If the strategy isn’t working out, they can move their liquidity to another strategy or to the high-performing strategy.
The above image depicts the best-performing strategy and other strategies that are currently active in Oddz. You can easily move liquidity between each of them and profit accordingly.
Highly Performing Strategy Analysis
We have selected to invest in the best-performing strategy. All you have to do is enter the amount that you’d like to invest and analyze the PnL curve along with the fund allocation into different pools.
As mentioned earlier, you can provide liquidity to a maximum of 10 pools and here the liquidity is provided to 3 pools where,
BTC PUT ALL — 33%
ETH PUT ALL — 33%
AVAX PUT ALL — 34%
This is what we call a strategy, a combination of 3 different pools where we can invest and profit from that investment.
How to Provide Liquidity Using Strategies?
https://www.youtube.com/watch?v=Q1zw4WjOuQE
Taking Options Trading to the Next Level
The goal of introducing strategies is to increase the efficiency of providing liquidity and utilizing it across the protocol. This way one can easily figure out the best performing pools and add liquidity to the same to profit massively. Ultimately, our vision is to take Oddz to a whole new level by implementing advanced features like strategies.
You can check out our Strategies here.
About Oddz
Oddz is a trustless on-chain derivatives trading platform that expedites the execution of call and put options contracts, conditional trades, and futures. It allows the creation, maintenance, execution, and settlement of trustless option contracts, conditional tokens agreements, and futures contracts in a fast, secure, and flexible manner.
It employs the synergies of Ethereum, Avalanche, Binance Smart Chain, Polkadot, and Polygon to unleash the potential of a decentralized derivatives market. It focuses on building solutions that can propel the DeFi ecosystem by simplifying derivatives trading and enhancing the user experience.
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