Option Liquidity Pools Walkthrough
This article serves as a visual guide for navigating our newest product, called OLP (Option Liquidity Pools). To learn more about OLPs, read the article “Here” where we explain in detail how our liquidity pools work.
In Summary-> Options Liquidity Pools allow options buyers to sell their position to options liquidity providers at any time at their chosen discount. As a liquidity provider, you can set a discount at which you want to buy a specific option. Once the order is fulfilled, Dopex exchanges the buyer’s and seller’s assets using its standard pricing model applying the specified discount.
Requirements:
option seller
- Gas Fees Dopex is based on the Arbitrum network, so it requires native $ETH for gas fees
- An SSOV or SSOV-P (ERC-721) position Our updated V3 version of SSOVs now offers an ERC-721 token representing your option position
- Option Pool Liquidity In order to sell your position, liquidity must be available for someone to take the other side of the trade
Liquidity Provider (Buyer)
- Gas Fees Dopex is based on the Arbitrum network, so it requires native $ETH for gas fees
- USDC / Underlying Tokens To provide liquidity for specific positions, you can either deposit in the underlying token or simply in USDC
#1 First step
Go to the Dopex.io official website where you will be prompted with the landing page. Here you can access the Dopex DAPP by clicking on “Start App” in the top right of the page or directly in the middle under the title.
#2 Second step
Once on the DAPP, you can connect your wallet to either Metamask/Coinbase Wallet/Walletconnect in the usual way by clicking the “Connect Wallet” button in the top right. Once connected, locate and click on the OLP tab found in the subcategory area in the top left corner of the page next to the Dopex logo.
#3 Third step
Great! You have officially made it to the OLP page and are ready to start P2P options trading. In the next section we will continue the walkthrough but from two different perspectives: the buyers (the liquidity provider) and the sellers (the option holder). )
#1 First step
First things first, in order to be able to sell an option position, you must own an ERC-721 token provided by Dopex when purchasing an option. To buy an option you can go to https://app.dopex.io/ssov and here you can choose which asset you want to buy a put/call option on.
#2 Second step
Once you hold an option position and are ready to sell/exit, go to the OLP page by following the first section of this walkthrough. Here you can see a LP positions section at the bottom of the page that illustrates the liquidity available within specific strikes and the discount at which they wish to buy. To sell your position (at the specified discount), simply click on the “Fill” button on the right.
and voila, after accepting the transaction, you have successfully exited your European options position. The funds should automatically be deposited into your wallet.
#1 First step
Option Liquidity Pools (OLP) allow users to provide option buyers with liquidity to sell into at any time at a pre-determined discount. To add liquidity, go to the OLP page by following the first section of this walkthrough. Once there, the process is very simple, you will see a “Provide LP Box” on the right side of the page. In this field you can choose to provide liquidity to buy a put/call at your chosen strike price and discount. Deposits can be made both in the base value and in stables.
#2 Second step
After providing liquidity, you can see your positions in the User LP Positions section in the middle of the page. This section illustrates the user’s position and how much of the user’s liquidity was used/how many options were bought. You can also withdraw your liquidity at any time by clicking the “Kill” button on the right side of the section.
That’s it! PS: Always remember to pay attention before you ape.
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📃 About Dopex
Dopex is a decentralized options protocol that aims to maximize liquidity, minimize losses for option writers, and maximize profits for option buyers—all in a passive manner.
Dopex uses option pools to allow anyone to earn a return passively. Add value to both option sellers and buyers by ensuring fair and optimized option prices across all strike prices and expirations. This is thanks to our own innovative and state-of-the-art option pricing model that replicates volatility smiles.
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