First of all: the project looks super interesting! :-)
I had a couple of questions about the project on which I didn't see an answer in the whitepaper. You mention you don't need market makers. In what way will liquidity for options be provided? Will there be series with expirations? Or will they be exotic?
It's not completely clear how matchmaking is going to look. Is it through an exchange/trading screen or something else? If it is through an exchange who puts up the prices? The community?
Since a lot people have extremely limited knowledge about these products I was just wondering who and in what way dcorp would offer guidance to (potentially) interested people.
Options offer so many opportunities, but without knowledge and guidance they might not be very interesting for a lot of people.
I am genuinely interested in this kind of information before investing. Thanks a lot in advance!
Thanks for the kind words and for asking the right questions!
1) "You mention you don't need market makers. In what way will liquidity for options be provided?"
There could be market makers because as the derivatives are on the blockchain, anyone is free to use the products. The options and futures (and other derivatives in the future) will implement the ERC20 interface, allowing them to be traded on any exchange. We will provide a smart-token, as was proposed by Bancor, to provide liquidity in addition. In fact, we are on good terms with Bancor and researching in what ways we can benefit from working together on the implementation of the protocol.
2) "Will there be series with expiration? Or will they be exotic?"
The derivatives are exotic by nature. We will provide defaults that match traditional derivatives as much as possible to promote adoption.
3) "It's not completely clear how matchmaking is going to look. Is it through an exchange/trading screen or something else?
We will release a UI (exchange/trading screen) that looks like a traditional exchange/trading screen as much as possible. The UI will be opensource, enabling others to create an exchange easily, generating more transactions and thus more fees for DCORP. (Also enabling others to build on their own ideas)
4) "If it is through an exchange who puts up the prices? The community?"
The community will, this can also be a third party exchange (even a whitelabel from the UI we provide). In the case of the smart token, automatic price discovery is used to determine the value of the derivative.
5) "Since a lot people have extremely limited knowledge about these products I was just wondering who and in what way dcorp would offer guidance to (potentially) interested people."
This is the toughest question. I dont believe we have a definitive answer that will satisfy as of right now. We aim to warn people of the potential dangers. Personally Id like everyone to do a test before being able to participate, like you need a license before you can participate in traffic driving a car. Its subjected to local regulation as well, were still talking about it. Any feedback and/or ideas from our community are more than welcome on this one!
Thanks, and sorry it took a moment to get back to you.
Mike@dcorp.itTo be honest your answers did not clarify as much as I had hoped. It is not clear to me anymore: is Dcorp planning a derivatives exchange or a platform where other people can build a derivatives echange on.
Based on your answers I would not rule out the possibility options screens will be largely empty and trades happen a lot at 'ridiculous' levels by 1 party who has no idea about option pricing (not guided with neither information or misinformation by market makers) and another who has until (professional) market makers step in.
A lot of people with an option background probably dream about what Dcorp is trying to achieve, however achieving this goal is something else all together. Could you please elaborate on the 10% fee on trades? 10% of what? 10% of the price of an option? 10% of the fee an exchange pays dcorp for using their platform? Small fee's are mentioned, however 10% fee as calculated by 10% * the price of an option sounds like a massive (opposed to small) fee to me.
One last question for Hansco, your bio mentions: "
and soon found himself successfully speculating by trading options and futures on the trading floor in Amsterdam. "
in what period where you in the crowd at the exchange and in what stocks? I did some asking around and so far nobody remembers you.
For other people reading this: don't take this as a negative please since there can be a lot of reasons for this (different period, different stock).
I still believe the project ideas looks very promising and if dcorp pulls it off investing in it is probably the best investment I could have ever made. But I am not convinced yet.. For the record: I really want to be convinced so I invest in the project and you guys pull it off..
