Kriptobi, one of the most active groups in Turkey on cryptocurrencies, hosted Financial Specialist Ryan Tian from the FinNexus project on the 28th of January, 2021. In the first phase of our event, the FinNexus project was introduced to our community members with group managers' questions and our guest's answers. In the second phase, 3 questions collected via Twitter were asked to our guests, and in the third phase, the 'live Q&A' section was completed. In the second and third stages, our community members, whose questions were answered, were rewarded with a gift worth 10$ at the time of reward distributing.
Could you give brief information about what FinNexus is? What does he aim to do and solve in this sector?
Ryan: FinNexus is a DeFi options platform. Our website is www.finnexus.io. It was established in 2019, and the core team is from China.
The CEO Boris was a blockchain veteran and cofounded a public chain called Wanchain 5 years ago. Now we have more than 10 full-time and 5 part-time team members in China, the US, India, Europe, and Singapore. In June 2020, FinNexus launched the first DeFi options model and it was the first few in DeFi. Till today, it has updated with 3 versions.
The latest version is called FPO (FinNexus Protocol for Options) v1.0, live on Ethereum and Wanchain. Just 3 days ago, FinNexus updated the UIUX and launched the new mining program (up to about 2000% APY now). Please feel free to check on options.finnexus.io.
What are your main features that distinguish you from other projects and what competitive advantages do you have?
Ryan: Cool. I think before I start to talk about the features, I need to introduce a bit about options, it may be a bit remote to some community members. What are the Options?
An option is a binding contract that allows the buyer to sell or buy an underlying asset (goods, stocks, indexes, etc.) at a predetermined price within a set time frame. For example, a fruit store wants to buy 500 kg of apples from an orchard owner, but the apples are not ripe yet until this August. The fruit store worries about the rise of the price, affected by drought this year. Therefore, it reaches an agreement with the orchard owner, that it may purchase the apples at the price of $4/kg in August. But it doesn't have to do so if there is some cheaper price on the market. In order to have this right, the fruit store pays the orchard owner $100 as compensation. The contract above is a typical option.
If we change the asset as apples into $BTC or $ETH and put the contract on-chain, it will become "decentralized options" on crypto-currencies. That is what FinNexus is doing. There are some unique features in FinNexus, I will keep it simple and into graphics.
1) A Universal Options Protocol: FinNexus aims to build cross-chain protocols, and put options with any underlying assets on-chain, not limited to cryptocurrencies.
2) Enhancement of liquidity by a pooled model: FinNexus will collect and pool the liquidity together in the collateral pool. It will be much deepening the options trading liquidity.
3) In FinNexus, option buyers may purchase customized options with shared liquidity. They can literally set the desired terms of options, like this in the UI.
4) In Options pricing, we coded the BS model in the smart contracts and use Chainlink to feed the price. IV is dynamically got from live Deribit (the largest centralized options exchange) feed.
*5) *There are other unique security features, and one may find them here.
What products are there in FinNexus?
Ryan: As I just introduced, the key product is called FinNexus Protocol for Options. It is a decentralized options trading platform, where option buyers may purchase and settle options, and option sellers can join in the liquidity pool and earn option premiums and mining incentives. Options are powerful tools for protecting and appreciating your crypto assets. I wrote an article on CMC before, please feel free to check it. Please find the detailed introduction product paper here.
Can you briefly explain what the FinNexus Protocol for Options (FPO) model is? Do you have any plans to expand the pooled version of FPO to live in a large network of different blockchains?
Ryan: FPO v1.0 (FinNexus Protocol for Options) is a decentralized and non-custodial protocol for writing, trading, and exercising options with pooled liquidity. The protocol is now launched on Wanchain and Ethereum and accessible through a single interface on options.finnexus.io. Later, FPO contracts will be deployed on other chains. Through FPO v1.0, options buyers can buy options very easily. Option buyers can set their desired options terms without worrying about the depth or slippage when trading. Also, because options are American type, options holders can exercise anytime before the expiry.
The liquidity is share among all options, unlike the liquidity in order books. This can be a great enhancement in Decentralized finance, just like the liquidity pools in Uniswap. Also, Option sellers can earn rewards safely and in a stable manner, without needing to have the expertise to hedge against the specific options risks, as the pool will do the risk diversification automatically. FinNexus has cooperation with Elrond, Kardiachain, and Huobi Eco Chain(Heco). Cross-chain deployment is on our roadmap in 2021. We are also talking about cooperation and planning to deploy on Polkadot and BSC.
FPO is audited by Peckshield and you can check the report on FinNexus Github.
Can you share with us your tokenomics? What are the use cases of $FNX?
Ryan: The FNX token is the network utility token for FinNexus protocols. It serves a variety of purposes including payment medium, settlement medium, collateral, liquidity mining, governance, and more. FNX token was issued in 2020. Right now the circulating supply is around 4 million USD. FNX is regarded as DeFi gems by many. Please find the Coingecko page here.
I noticed there is a branding new mining program going on that can get 320x on the rewards, can you tell me more about it?
Ryan: Yes! The new mining only started this Monday and attracted more than 3 Million USD TVL in the liquidity pool in 2 days. To put it brief, there are several features in the new mining program:
△ High Rewards: up to around 2000% APY, which means 20x in one year. You can see the real-time APY on this site https://options.finnexus.io/ and go to the 'mine' page
△How to Participate: with stable coins like USDC/USDT, there are no impermanent loss
△How to Maximize the Rewards: Using your stable coins, and accompanied with FNX to get the 20x boost in mining; then lock FNX in the mining pool to get up to 16x in the rewards.
And this one will give you a step-to-step guild on how to operate and interact with your wallet in mining.
There has been a bit of a buzz recently about a pretty big airdrop you are launching these days. What is it all about?
Ryan: Tomorrow is the airdrop time! We are distributing 1000 $FNX (currently worth around $200) EACH to 500 qualified DeFi users.
So who is qualified for the airdrop? Including:
△ FPO USDC/USDT liquidity contributors with over 1000USD before UTC 12:00 Feb-05--2021,
△ Over 0.5 WBTC or 10 ETH contributors in the Hegic liquidity pools,
△ Participants in Curve Dao with over 2000 CRV balances,
△ YFII Holders who have more than 5 YFII,
△ Other whitelisted addresses...
It is a highly targeted airdrop for intensive DeFi users. Well, there is still time, if you may contribute more than $1000 in the FinNexus USDC/USDT pool, you can get a $200 airdrop tomorrow :)
Finally, can you give us some information about your roadmap and how #FinNexus has progressed so far? What awaits us in the future?
Ryan: There is a lot going on in the roadmap, and I will keep it short:)
Short term plan in Q1 2021
△ FNX/ETH liquidity mining on Sushiswap,
△ An experimental pool with algorithmic stablecoins, in cooperation with $FRAX,
△ Community voting for FNX token redistribution/burn.
Mid and long term roadmap:
△ L2 and cross-chain,
△ More assets as collateral for trading options,
△ More underlying assets for options,
△ More user-friendly strategies, NFT strategic tokens,
△ Collaboration with vaults, like IL hedging. Details can be found here,
△ Continuous innovation on the options protocol in further enhancement of liquidity and trading
△ Other decentralized derivatives,
△ Ultimately build into a universal protocol that allows anyone to issue any options with any assets as collateral, like Uniswap or Sushiswap but in the DeFi Options,
△ Full on-chain Decentralized governance.
Twitter Question 1.
Which target users does FinNexus aim to serve? Will its technology be easy for participants to use but still ensure open, transparent, and equal way?
Ryan: The users of FPO can be both the option buyers and yield chasers (as the options sellers). Options buyers can use the options to hedge against the price movement risks, and speculate on the next market movement. They can be individuals, institutions, miners, and vaults. While the pool participants as the sellers are normally yield hunters.
The on-chain building infrastructure will make sure that the liquidity pool and options purchase & settlement will run in an open and transparent way. Also, we will build a detailed dashboard to show all the details on the option purchases, tradings, settlements, and pool analysis.
Twitter Question 2
What are FinNexus 's utilities and mainly real use cases? What is the long-term plan for FinNexus in 2-3 years?
Ryan. I think I have introduced the FNX token's main use-cases. It serves a variety of purposes including payment medium, settlement medium, collateral, liquidity mining, governance, voting, and more. The most interesting part is that we will redistribute the fees collected in the FPO model, and redistribute them to the long term FNX stakers. It means that the FNX stakers will have both FNX and USDC rewards. In 2-3 years, we will make the liquidity pool big and have more underlying assets. It means the pool can be the counterparty for options on not only cryptocurrencies but golds, stocks, fiats, indexes. In this way, the pools' risks will be further diversified. We are aiming to become the DeFi options leading force and ranked top 50 in CMC.
Twitter Question 3
The governance process begins at the FinNexus Governance Forum, where proposals are discussed for the first time. Can you tell us the details of this governance process? Is voting power equal for all?
Ryan. Our governance portal was live on https://finnexus.io/. Just about two months ago, and we are still young in decentralized governance. But there are already lots of fruitful topic discussions on the forum, https://forum.finnexus.io/. You can see that we are living on two chains, so we have 2 snapshot pages for voting. The rules can be found here. There have been 5 proposals discussed and passed there till now.
What is more important is that we have included all the possible voting power together, even the FNX holders in the FPO protocols, Uniswap pools, Sushiswap pools, and Wanswap pools. We strive to make it equal and easy to participate. The goal is to build FinNexus into total DAO on-chain governance in 2 years.
Do you plan to create the NFT support in FinNexus in the future? And how will it work?
Ryan: Yes. NFT is on the roadmap and it will be a great combination with options. I will give you an example of what we planned.
If you want to buy an ETH, but fear that the ETH price may collapse in the near future. We can provide you protective ETH in an NFT format. It will be an ETH together with a put option. For example, the current price is 1300USD. With the ATM put option, the NFT value can never drop below 1300USD, while you are fully eligible for the gains if the ETH price is in the bull run. This will be a simple example of the future NFT model in FinNexus.
Many projects rug pulled an exit scam recently. Why should investors trust your project not to do the same?
Ryan: Decentralized governance and community control is FinNexus's goal. We are now allocating more than 70% of the total supply into the hands of community reserves. And we launched the community governance system 2 months ago. It is a good start. There will be an important community voting for token burn next month. I believe community governance and control will be a key part of FinNexus' future.
The token distribution is open and transparent. In the future, the keys to the whole protocol for FPO and token will be in the hands of communities for on chain governance.
There are many very successful blockchain projects with the same ideas as Finnexus, so can you tell us the difference between Finnexus and those projects? Do you feel confident that Finnexus will have some outstanding features compared to those projects to attract users?
Ryan: There are not so many in DeFi options. I wrote articles for some detailed comparison on these platforms. Please find them below.
Smart contracts are vulnerable to bugs, and even recently three big new DeFi projects were victims of this, costing users funds. How efficient and secured is your smart contract, and did you ever audit it via any external party?
Ryan: We were audited by Peckshield and the details can be found here. There are a number of designs for the security of the FPO protocol, including:
1. Minimum Collateral Requirement
2. Pricing Adjustment Coefficient
3. One-hour Chill Time
4. Moving Average IV and the IV Surface Mapping
5. Dual Decentralized Oracles
Please find them here.
From where you get the project name? What does it mean to you? And why you choose this name for your project?
Ryan: Finance + Nexus, that's where the name is coming from. We want to build connections and bridge the gaps among different counterparties in finance.
Please mention 3 great features of FinNexus, which makes it ahead of other projects?
Ryan: Can I name 3 of the best features for investment in FNX?
1) Low market cap.
2) Promising DeFi derivative market and universal options model.
3) experienced team and creative protocol with innovative mining mechanism.
What is the ultimate vision that your project is trying to achieve within the cryptocurrency market? Obviously, the whole space will experience huge growth in the upcoming years, but what role would you like the FinNexus project to play in this?
Ryan: FinNexus aims to be the leading force in Decentralized Derivatives. Do you know how much the derivative market is in traditional finance? It is measured in quadrillions, over 100 times the size of the spot market. Now Uniswap and Sushiswap is the spot Dex in DeFi. Think of what the DeFi derivative may grow into in 3-5 years.