In other words, Deriswap offers all services from swaps and options to loans. Cronje has been very successful in launching the Yearn protocol and now focuses on developing a new comprehensive financial protocol.
Providing All Useful Services at One Place
Decentralized financial solutions or DeFi have experienced considerable growth in 2020. Many services were launched, and many older ones saw a significant rise in value and adoptions. Tools and services that help these protocols were successful, too. But in the overall concept, there are still many challenges to overcome to see a practical, comprehensive solution based on blockchain technology.
Andre believes that the current DeFi industry is segmented. He points to famous services like Uniswap, Sushiswao, Deribit, Hegic, Aaave, and Compound, that each of them supports a specific need of users. Andre thinks Deriswap can be the solution for this segmentation. According to his blog post:
“Deriswap (currently under audit), combines Swaps, Options, and Loans into a capital-efficient single contract, allowing interaction between the two assets that make up the pair.”
As mentioned before, Andre plans to combine multiple DeFi services into one and provide a practical, comprehensive protocol. Swaps, oracles, options, futures, and secondary markets are the components that he describes for his next DeFi protocol.
Andre chooses the ETH-BTC pair as an example to show the features and components of Deriswap. He says the swap service in Deriswap is like Uniswap x * y = k. In this scenario, users can swap between coins, and liquidity providers receive rewards as trading fees.
Like most of the DeFi services, Deriswap needs oracles to provide access to a real-time price data source. Andre says TWAP oracle will be used in the new protocol. Oracles will help the protocol report realized variance, realized volatility, implied volatility, and price in selected time frames.
Options service is the other important part of Deriswap. Andre says about it:
“Combining swaps and Options have an interesting interaction; options are traded on volatility, trading fees are a hedge against volatility. The pair volatility(+ve trading fees) offsets the losses from settled options (-ve settlement).”
Yearn.Finance founder believes the new DeFi protocol will help more adoption and offer more efficient services. He focuses on efficiency as the most important benefit of his consolidated market. If he becomes successful in Deriswap, we can expect multiple famous services for users in a single platform that significantly reward LPs, too.
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