ClearDAO announced today the barrier option marketplace on Binance Smart Chain testnet is now open to everyone for public alpha testing.
This is the first proof-of-concept marketplace built using the Clear SDK. The Clear SDK is expected to be available by end of 2021.
ClearDAO is a decentralized derivatives factory where DeFi developers can use the tools provided to build bespoke derivative products. The marketplace on Binance Smart Chain testnet offers options on BTC, ETH, BNB, and basket of cryptos.
The option products available on ClearDAO are barrier knockout options, not the standard vanilla options available elsewhere. The marketplace has an easy-to-navigate user interface where a 4 x 4 matrix displays the options of different maturities (1 day, 3 days, 7 days, 14 days) and barrier levels (5%, 7.5%, 10% 15%).
They offer different risk profiles and expected returns to traders. Traders can trade both calls and put to enhance returns and manage risks of their existing portfolios.
In traditional finance, the barrier to entry to OTC derivatives are extremely high and are often exclusive to institutional investors. DeFi in many ways aims to replicate the traditional finance but without the walls that keep the majority out. As DeFi matures and participants become more sophisticated, the need to hedge cryptocurrency portfolio risks will rise. There are currently no customizable derivatives in DeFi that tailor to the need of the buyers, and this is the problem ClearDAO is solving.
Currently, in the cryptocurrency industry, the role of market makers and liquidity providers is highly accessible to most participants, including individuals and institutions. This is also true at ClearDAO, where an automated market-making algorithm is deployed in the marketplace to allow anyone to participate as a liquidity provider and a liquidity taker. The governance aspect of the ClearDAO ecosystem is expected in 2022. Community members will be able to collectively decide the development path of the project.
ClearDAO recently closed a $2.5 million private round fundraising. According to the project roadmap, the Clear SDK will be available in Q4 of 2021. In the same quarter, the project is expected to deploy on Solana devnet. DAO governance and marketplace mainnet deployment are targeted for Q1 of 2022.