iGain is an option-like trading platform in which the price settlement approach will depend on the DeFi investment target (indices, impermanent loss, interest rates, etc.). It is based on a dual-token system, where users can buy Long and Short tokens, as “calls” and “puts” on future changes of those investment targets.
In this iGain ecosystem, they can create a variety of financial derivatives by merely changing price settlement mechanisms based on the investment target.
Previously, we had launched “iGain – Impermanent Gain” for liquidity providers (LPs) to hedge against future Impermanent Loss (IL) changes (which affects a sizeable number of liquidity providers) with limited premiums. In iGain Impermanent Gain, they take trading pairs’ ILs as investment targets for our options.
Read the Whitepaper for more details on the iGain ecosystem and its mechanisms: https://hakkafinance.gitbook.io/igain/
Now, they are launching a new flagship product in the iGain Ecosystem: Interest Rate Synth (IRS).
Introducing: iGain – Interest Rate Synth
iGain- Interest Rate Synth (IRS) represents the second product in the iGain ecosystem. It is an interest rate derivative providing lenders and borrowers a platform to hedge against the risk of future changing interest rates. It empowers investors to lock future interest rates, by purchasing Long and Short tokens.
For example: Ben, as a lender, can secure future interests by purchasing Short tokens, while Wego, a borrower, can cap borrowing costs by buying Long tokens.
The entire system design does not involve a deposit of the principal into the smart contract. The capital efficiency can then be maximized, since the capital and liquidity available are all gathered into the trading market of the interest rate derivative.
How Does iGain IRS Work？
iGain IRS has Long and Short tokens to represent respectively “long” and “short” interest rates