From the recent acquisition of Blockfolio by FTX, it can be seen that encrypted products focused on mobile have huge value potential, and the potential of the cryptocurrency options market is also huge, and PowerTrade provides retail investors with mobile products for encrypted options trading.
Written by: Paul Veradittakit, Venture Capital Partner of Pantera Capital Translator: Lu Jiangfei
Pantera Capital has just led a US$4.7 million investment in PowerTrade. PowerTrade is a “mobile-first” encrypted options product that aims to help retail investors easily trade cryptocurrency options.
What are cryptocurrency options?
Options give cryptocurrency holders the right to buy and sell cryptocurrencies at a predetermined price (strike price) at some future time (expiry time). In addition to allowing option traders to profit in the highly volatile crypto industry, options are also A good way to hedge financial risks, so it is very popular in cryptocurrency trading.
Currently cryptocurrency traders can purchase two types of options, namely call options (CALL) and put options (PUT). Call options give cryptocurrency holders the right to purchase assets at an exercise price, and put options give cryptocurrency holdings The right of a person to sell assets at a predetermined price.
People who buy call options want the price of encrypted assets to continue to rise so that they can be sold at a price higher than the strike price after the option expires; for people who buy put options, the situation is the opposite.
But the most important thing is that no matter which option you use, your downside space is limited to the amount invested in the option price, which is also the maximum loss amount of the option investment, so the option buyer can basically determine how much potential loss he will have. However, the upside of buying options positions is unlimited, which means you may get a return several times the original investment.
How big is the options market?
Over the past few decades, options have been a key component of financial markets. In fact, options were originally used by farmers in order to insure the price of crops when they were brought to the market. Since then, option trading has almost covered all traditional financial markets, while cryptocurrency options may eclipse spot trading.
Of course, compared with the cryptocurrency spot trading scale of up to 1 trillion US dollars, the current annual trading volume of cryptocurrency options is only 0.03 trillion US dollars. But from another perspective, it also shows that the cryptocurrency options market has a huge potential for growth.
Why is the crypto option product PowerTrade so attractive?
PowerTrade is a “mobile-first” encrypted option product, which is excellent in terms of new user access, user experience, and user education. It provides option contracts that allow users to purchase options at a minimum price of $1.
Does PowerTrade have native tokens?
The native token of PowerTrade is Fuel Token, and its main functions include:
1. Mortgage tokens can get transaction fee reduction or exemption;
2. Liquidity mining incentives;
3. VIP access privileges
PowerTrade also launched an insurance fund DeFi alternative, namely DAO (Decentralized Autonomous Organization): it can provide protection for margin trading. In addition, token holders can also vote on fund management, including
1. Hedging risks or seeking additional benefits;
2. Approve the claim to make up for the transaction loss;
3. Provide “guarantee” services for other transactions;
PowerTrade team behind the scenes
PowerTrade team members mainly come from some experienced executives, product personnel and traders from top institutions and cryptocurrency companies. Some of the team members come from Liquid, one of the earliest cryptocurrency exchanges in the industry, which has more than 50 billion U.S. dollars in trading volume in the past 12 months.
Which other investment institutions participate in PowerTrade?
In addition to Pantera Capital, other major investors participating in this round of PowerTrade financing include some of the world’s top decentralized financial and trading investment institutions, such as Framework, CMS, LedgerPrime, Signum Capital, QCP Capital, etc., as shown in the figure below. :
Why is PowerTrade so exciting?
From the recent acquisition of Blockfolio by the cryptocurrency derivatives exchange FTX, it can be seen that encrypted products that focus on mobile have great value potential because such products can attract more users to participate and use. PowerTrade hopes to provide crypto option trading services for retail investors, with the goal of lowering the barriers to entry for users and improving user experience. The crypto option market is in the development stage and is expected to become a large-scale market, so the tools/products in this field are worthy of attention.
The members of the PowerTrade team have a good combination of crypto trading and institutional-level services, and are fully capable of realizing their vision with the support of investors. With the success of PowerTrade, we will see that the cryptocurrency derivatives market is expected to grow exponentially and expand to more mainstream users.
Source link: veradiverdict.substack.com
