Decentralized Platform for Volatility Derivatives.
Decentralized Platform for Volatility Derivatives. The go-to platform for volatility hedging and trading with a focus on blockchain-native asset prices, value of LP tokens, interest Rates, DeFi farming & staking rewards. Divergence provides a simple, yet effective, solution for users to trade and hedge their day-to-day DeFi-native volatility exposures. It offers liquidity providers low-friction access to earning volatility premiums as an alternative source of yield, in addition to the lending and liquidity farming yields they collect from other protocols. Our first release is a specialized AMM-based marketplace for binary options written on a broad range of underlying asset prices, interest rates, and staking yields. Markets can be created at strike prices and expiration cycles of choice, using any fungible token — including DeFi assets issued by other protocols — in a one-step minting and seeding process. At any given time, only one asset is required for liquidity provision. No over-collateralization is required for writing binary options. The trading experience is also akin to participating in a prediction market, with a deterministic payoff of one collateral or nothing from holding a binary option token to expiration. Divergence tackles the market continuity problem by automatically rolling over pooled liquidity which reduces costs for liquidity providers to manage expiration issues in a smart contract environment. This is a crucial feature that enables continuous market price-discovery which will serve as a foundation for our next-stage products, i.e. volatility indices and index derivatives that provide opportunities for users to gain long and short exposures to on-chain tokenized volatility. Designed to enhance composability, continuity, and capital efficiency of on-chain options markets, Divergence is positioned to empower other DeFi protocols by creating a financial risk-management and yield-enhancing layer on top of their existing value propositions to encourage adoption.