Degis Naughty Price Protection
Degis announce their mainnet will launch on April 1st, with their initial product, Naughty Price Protection, released. The naughty price protection aims to protect users from highly fluctuated token prices. The market is volatile all the time. Meanwhile, black swan events are also ruining people’s assets. As a result, the protection of prices is especially essential to crypto space.
Working Mechanism
Look at the workflow of the naughty price system below:
The major roles are creator, provider, buyer&seller.
Creator stake USDC into the policy pool as collateral and mint protection tokens proportionally. After creating protection, the creator can sell protection tokens to the swap pool before the expiration date. The swap pool is an AMM-based capital aggregation pool where trades between buyers and sellers (protection tokens and USDC) are constantly happening. When a protection hits its expiry date, the payout is only determined by certain event(AVAX price below $100). If the certain event occurs at the expiry date, protection holder receives all collateral. Else, the creator gets the collateral back.
Provider deposits USDC-Protection Token pairs in the swap pool to provide liquidity, getting LP tokens proportionally, which can be staked to farm $DEG tokens. LPs will also earn all transaction fees in the swap pool(The fee is 5%).
Buyer&seller are users who want to protect their assets from the highly fluctuated market. They can buy protection tokens in the swap pool directly. For sellers, if they create a protection token and then sell it into swap pool, they can get certain USDC back. When the expiry date comes, if the certain event does not happen, the seller can redeem all the currently staked USDC.
Time Cycle
During the trading period, there are 15 days for users to create/redeem protection token, buy/sell protection token in swap pool and provide/withdraw in liquidity pool. The last 5 days before the expiry date are called locking period, in which only liquidity providers can provide/withdraw their position in liquidity pools.
An Example
This is an example to make the process clearer. You use 1 USDC to create a protection token which is executed if the price of AVAX is lower than $90 at the expiry date, then you sell it to the swap pool for 0.5 USDC. When the expiry date comes, if the price of AVAX is lower than $90, the person who bought your protection token with the price of 0.5 USDC will get 1 USDC payout. Else, you will get 1 USDC back.
The Naughty Price will be launched at 8am UTC, April 1st. And before that, we will release a detailed tutorial. Stay tuned Degisons!
About Degis
Degis is the next generation all-in-one protection protocol, 1st on Avalanche.Degis will offer complete protection to users, keep building the decentralized protection market and ultimately bringing impact to the whole Crypto world.
