HEGIC Options Trading Protocol Review
Hegic on-chain options trading protocol on Ethereum 2021 review.
The demand for crypto options has remained on the rise for the past two years with volumes growing to over $6B. Nevertheless, liquidity has been a stumbling block for options trading. This has negatively impacted many DeFi platforms. Hegic is aimed at solving the problem.
Key Points
- The smart contracts of the Hegic project already have $66M staked on them. This has raised the status of Hegic to be the top platform for decentralized options trading.
- Hegic presently has $82M as its cumulative options trading volume.
- Hegic is an Ethereum-based DeFi protocol.
- Hegic solves the problem of liquidity for decentralized options trading.
Introduction
The Hegic protocol is a project designed on the Ethereum blockchain. Being an on-chain peer-to-pool solution for options trading has endeared it to many, hence the following it enjoys in the DeFi community.
Unlike past projects, Hegic is delivering on the great liquidity it promised. After what seems like ages, traders can finally tap into the full potential of decentralized options trading and enjoy actual liquidity for WBTC (Wrapped Bitcoin) and ETH.
Hegic has not only been able to amass more than $66M in Total Value Locked (TVL) since its launch, but it has also generated impressive trading volumes.
The future of Hegic looks promising, as the protocol may evolve to become a DeFi platform. In such an event, the first beneficiaries will be those who own HEGIC, the native token of Hegic. A 1% reward of the size of every option will be given to them for staking the token.
From the look of things, Hegic appears to be on track to becoming a Uniswap for options trading, especially when things like its growing volumes and limited competition are considered.
Technology
Like its counterparts, the Ethereum blockchain is the underlying technology of Hegic. The smart contracts of the protocol support it and contribute to its smooth operation. The Hegic ecosystem has three types of stakeholders, namely: HEGIC token holders, liquidity providers, and options traders.
Hegic has provided an interface that is user-friendly and simple to use for options traders. Furthermore, these traders will have the luxury of choosing either ETH PUTs and CALLs or WBTC. Traders are also at liberty to set the Period, Strike Price, and Option Size of any option they settle for.
Hegic has found a brilliant way to make liquidity abundantly available to option buyers. This will be done by allowing liquidity providers to become options sellers by staking their WBTC and ETH.
Growing Ecosystem
For a recently launched project, the Hegic ecosystem is developing at a speed only established companies can muster. Hegic is currently the number one choice for decentralized options trading. The project is so much trusted that over $66M has been entrusted into its care via staking on its smart contracts.
Furthermore, the volume of both ETH and WBTC options are steadily on an upward trend, currently valued at around $82M. This is an impressive number, taking into consideration that Hegic is still in its beginning phase. Increased patronage is expected as more people get to know about the platform, which should bring about higher trading volumes.
Since its launch, Hegic already has over 800 active users. Traders tend to go for ETH options compared to WBTC options. The success of Hegic has not gone unnoticed by certain key figures in the DeFi sector. Nexus Mutual ($NXM), an insurance protocol, added support for Hegic on its platform not very long ago.
The significance of this is that if the ETH or WBTC liquidity pools of the Hegic protocol should suffer a hack attack, those who bought insurance from Nexus Mutual will be provided coverage for their losses. The price of Nexus Mutual insurance for Hegic is currently 2.0% per annum.
Conclusion
The crypto options market is experiencing rapid growth and this is expected to continue over the next 5 years. Hegic is a perfect product for traders who prefer decentralized platforms. For now we’ll end with saying the project is already off to a good start.
