Gusoku: Options-based IL protection - HackMD

Ecosystem Development
#1
Would you like to see this feature added to SushiSwap?
  • Yes
  • No

0 voters

4 Likes
#2

Whoah, that’s an impressive proposal. However:

  1. The ‘tax’ and initial funding should come only from those, willing to obtain IL protection.
  2. The upside IL is not that painful as the downside. It should be optional, as well as how far OTM a person would want to obtain options.
  3. Because we really can’t predict the APY for the pools involved, the options should provide customizable duration (i.e. from weekly and up).

And I really don’t like the idea of ‘taxing’.

1 Like
#3

do it asap.

we need this innovation.

1 Like
#4

Thanks, glad you liked it!

  1. The initial funding would come from one person of the SushiSwap core team. I agree that it’s fair if the “tax” for the Options Warchest comes only from those choosing to obtain protection. We still need to figure out the best way to keep the war chest from running dry.

  2. Call options can be made automatically optional, depending on the cap price the user is willing to pay. Priority would be on the downside IL (Put options).

  3. Options expiration dates are set when minted by options sellers. For now, we don’t plan on supporting the functionality of creating custom options; we would depend on the options available from the different options protocols. But the Options Warchest will be designed to handle options expiration by either selling them back to the writers(sellers) or exercising and then buying new options with further expiration dates.

We will work on finding and implementing the most optimal way of keeping the Options Warchest from running out of funds. Then, I’m sure we can come up with an appropriate name for it other than taxes :slight_smile:

#5

We’re on it! Happy to know it’s something the community needs and would appreciate :slight_smile:

#6

This feature is a must. It should help LPs to protect them volatile assets fluctuations thus maximizing gains. Overall, this improvement will bring in more value to sushiswap and most importantly, volume. I’m looking forward that this will be launched before this year ends.

1 Like
#7

We planned it as a 3-month project, so it should be launching in Q1 2021 (development hasn’t started yet): https://hackmd.io/j70mou-pQ_KZ8lcDPrb1qA#Milestones.

But you’re spot-on! With this, we’re expecting to maximize LPs gains through automatic IL protection while bringing in more volume :slight_smile:

2 Likes
#8

This looks awesome! I was unaware there were so many options protocols being built. This would be an amazing addition ontop of sushiswap, further distinguishing sushiswap from uniswap. Unfortunately I do have to say I’m not a fan of payment up front, you guys seem really nice and professional however with no dev track-record to look at you guys could totally just ghost. A payment plan similar to Bentobox where payment is tied to deliverables would make me feel better about it, cheers! :turtle:

6 Likes
#9

This is innovation, we need this big thing to solve IL in DEFI world.

1 Like
#10

I understand and respect your concern; I know how, especially in this space, it’s hard to trust anonymous people. ATM, there’s just no way to prove our dev track-record without breaking anonymity, so that will be our first chance to start building a new one on the SushiSwap community.

We had initially contemplated a milestone-based grant, but then the core team member who’s going to pay for it with the growth fund proposed and decided on that two-part grant.

#11

Only one more of the many innovations that are going to help keep SushiSwap ahead of the curve! I’m excited to be a part of that!

#12

The idea itself is pretty promising and cool. But still have three concerns:

  1. Will Gusoku be implemented in all pairs? Or just ETH-stable pools?
  2. The real demand for IL protection function. Not sure if Gusoku could be that attractive as predicted.
  3. The payment. Don’t think 1/2 grant at start is proper enough especially when Gusoku devs are anonymous. Personally prefer a performance-based payment.
    Thank you!
3 Likes
#13

  1. The initial idea was to implement it only for ETH/Stable pools. But since options for different pairs are starting to show significant liquidity, we are considering implementing it for all pairs that have options available.

  2. I guess we will have to wait and see how it performs after launch. What I can say is that people are trying to find ways to circumvent the impermanent loss problem. Take a look at Crypto Economics, Perpetual Liquidity and IL offsets and StopLoss for a couple of examples.

  3. The two-step grant was proposed to, and agreed with, the core team member who is paying for it. I know it’s hard to trust anonymous people and that my word alone would not mean anything, but the least I can say to you is that we’re not doing this only because of the money. We’re doing it because that’s something we would love to build and offer to the community.

2 Likes
#14

How do I go about becoming a dev on this proposal? I have ~10 yrs development experience and can write solidity/web3 code.

I have already developed a frontend based on this exact strategy for a hackathon in less than a week. It uses Opyn options, the code can be viewed here: https://github.com/conspyrosy/hedgehog

And it can be accessed here: https://conspyrosy.github.io/hedgehog/

Let me know and we can get to work!

3 Likes
#15

Maybe jump in the discord and chat with the team there, I’m sure they’ll be keen to have another dev help out!