4th Weekly Twitter Space covering the Optimism ecosystem.
**Collect and own this episode as an NFT!
Featured Guest: Tam from Putty
Tam’s mission is to bring more financial sophistication to the NFT space by building an open-marketplace for ERC-20 and ERC-721 put and call options.
Jrocki read white paper and was one of the first in the discord
Putty is an options platform where you can buy and sell put options on NFTs and ERC 20 tokens.
Putty enables you to hedge your risk and protect your downside for floor price dropping or token price dropping.
For example, if you have an NFT worth 1 eth, and are worried the price might drop, you could buy a put option for a small premium at a strike price of .5 eth for say 1 month.
If the price of the NFT goes below 0.5 eth at any time during the next month, you could exercise that option, and get 0.5 eth from whoever sold the option to you.
Cally is also an options market, but for call options instead of puts.
Cally enables you to sell covered calls on your NFTs by setting a specific duration and premium.
Users can seek to earn a premium on NFT by staking it in a vault and selling a call on it.
Calls can be set based on a dutch auction.
If you set the parameters correctly, you can try to ensure the other side of trade is far out of the money, so you can kind of earn yield. Its a way to avoid being liquidated on your NFTs, although there is still risk.
Putty Version 2:
They are developing specifications for version 2.
V2 of Putty will implement a model based on the Black-Scholes options pricing model, a mathematical method (using differential equations) to calculate the theoretical value of an option contract.
The Black-Scholes model requires 5 inputs. These factors determine a user’s likelihood of turning a profit:
An options protocol for ERC-20s and ERC-721 tokens will enable structured financial products to be built on top of these crypto assets, enabling retail crypto investors to access ERC-20 and ERC-721 based derivatives.
This will ultimately broaden and diversify the type of financial portfolio that can be built in the realm of cryptocurrency.
For example, a user could create a generic floor NFT option.
On top of an option based on the floor price of an NFT, you could create an NFT index that tracks the prices of a group of different NFT collections.
Imagine building an NFT based index fund that tracks the floor price of a set of blue-chip NFTs on mainnet - such as Crypto Punks, Bored Ape Yacht Club, Xcopy, and Doodles.
Another use case for Putty is in GameFI, where users taking damage or health los. Loss of health impacts the price of the NFT when they go to sell it. To mitigate downside risk of damaging your in-game NFT, the user could buy a put option on the NFT before they engage in the task that can damage the price of the NFT. This is a way to hedge potential risk.
A lot of Runescape players got interested in GameFI by way of selling characters and gold online. If we create Runescape on top of a blockchain, it could be a huge use case.
Tam is also stacking optipunks ahead of the OP airdrop
Soul bound NFTs: non-transferable and non-traceable.
Optimism stats:
Hop Protocol
Cryptovania mint - Quixotic created a direct fiat on-ramp to the website.