The past few days have been eventful, to say the least, for the entire crypto space. For the first time in a while, BTC dipped to $30,000 dragging the entire crypto market with it. According of DeBank data, this also led to liquidation of more than $700M collateral assets in various DeFi Lending/Borrowing platforms with a 24-hour time frame. Currently, the traders are at a crossroad, divided between those who have exited the market to protect their remaining assets and those who have stayed wishing to further increment their profits and “buy the dip”. However, only time will tell who has made the right decision, as the tensions are far from over. All this division stems from the very nature of a volatile market. These situations demonstrate a key need in the DeFi world: risk management protocols.
What AiFi Does
AiFi presents the issue of crypto volatility with coherent products of decentralized multi-chain risk management protocols that provides DeFi asset protection and management solutions. AiFi offers protection against severe losses due to volatility through the utilization of option contracts. In practice, the user who buys the “insurance” places a strike price for the amount he would like to cover and sets a specific time-limit for that order to expire. The catastrophic liquidity of assets in DeFi lending/borrowing platforms happening in the past few days would have been avoided now as there exists a value support for the underlying assets regardless of the immediate token price for the duration of the option contract. For the borrower, this will also enable much better borrowing terms. Furthermore, the borrowing power (or collateral ratio) of the underlying asset is now dynamically adjusted vs. a predefined value that’s often very limited for volatile tokens.
For those who want to acquire a deeper understanding on the subject of option contracts, we have provided the following link:https://aifi-finance.medium.com/aifi-research-why-are-options-important-in-defi-f831f4f9cad8
How is AiFi Different?
Unlike its competitors, AiFi truly stands out as the only risk management protocol on the market to come with additional tools and features to ensure a smooth product implementation from the least to the most experienced crypto traders on the market.
One of the assets that make AiFi unique is its integrated option trading feature, which coupled with the fact that it can operate on multiple chains, rewrites the rules of risk management in DeFi. This versatility will allow traders to integrate the option contract feature to their DeFi platform of choice, thus eliminating the need to jump from one platform to another for risk management.
Furthermore, traders will be able to opt for either manual or Robo trading. The Robo trading represents an automatic system that scans and compares throughout all liquidity pools to integrate multiple trading strategies and grant the best return back to the user, according to user-assigned risk tolerance. This feature is perfect for those who don’t have the time nor the knowledge to look through all the market opportunities themselves, as this is a tedious and time-consuming process.
Lastly, users will be able to trade options and combine strategies freely in a P2P marketplace and also enable liquidity mining features for the service users. The user can place tokens in the liquidity pool, or directly through the P2P marketplace, and become an option seller.