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Derivatives have been a part of traditional finance for centuries. In fact, traders in Osaka, Japan, experimented with the first versions of futures contracts in the 17th century, which allowed buyers and sellers to settle future delivery agreements at a predetermined price on the rice market. Two hundred years later, the Chicago Board of Trade (CBOT) was established in the 19th century to allow American traders to hedge against price volatility risk. Futures contracts and options contracts began to develop rapidly and vibrantly from then on.
Today, derivatives are a vast market, with statistics reaching up to $1 quadrillion according to Investopedia as of 06/30/2022. Many professional market analysts have placed this market's scale at ten times the total global GDP. The option investment form in the crypto market has only just begun to develop, but it is gaining momentum following the shock collapse of the FTX project or investment funds in 2022. With trading ranges up to 8-15 times higher than those in traditional financial markets, the crypto market is indeed a promising land for derivative investors who can profit from the volatility of the coin rather than relying on asset prices.
In the midst of these developments, the DBOE (DeFi Board Options Exchange) has received a lot of attention and interest. DBOE is an options exchange that combines DeFi and the traditional financial options market with crypto. DeFi projects are increasingly gaining attention from the cryptocurrency community, as the demand for investor autonomy and asset control becomes more important than ever. This has led many experts and large financial organizations such as Goldman Sachs and Amberdata to evaluate options as the third wave of cryptocurrencies that will surge in the future, according to the general financial law: Spot Wave -> Futures Wave -> Options Wave.
This article aims to provide readers with an in-depth understanding of the DBOE project, which is currently being evaluated as a competitor with some big giants such as Deribit, Bybit, and dYdX. DBOE stands out from other exchanges due to its unique features and approach to trading options.
One of the outstanding features of DBOE is its price spread method, which allows investors to participate in all 4 types of options - Long Call, Long Put, Short Call and Short Put. This is in contrast to most exchanges, which only allow participants to take long positions while the exchange acts as a coordinator, creating transparency and fairness risks for players.
DBOE was built based on the DeFi and Web3 model, which means investors do not need to deposit money or register through the exchange, and they can manage their assets on their own DeFi wallets. The exchange has an elegantly designed optimization that is user-friendly and takes less than 15 seconds for players to familiarize themselves with and start trading. DBOE offers an excellent combination of CLOB and DeFi models, allowing transactions to take place quickly with high liquidity and much lower fees than other DeFi exchanges.
Trading on DBOE is simple and quick, requiring only four steps:
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Login quickly by just connecting your DeFi wallet.
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Select the coin you want, for example ETH.
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Select the expiration date for options and choose the price (or options premium).
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Approve and then place an order.
DBOE options offer investors a simpler investment method with much higher profit margins compared to Spot, while also allowing them to manage risks easily and efficiently.
Recently, DBOE partnered with Chainalysis to improve user protection and prevent money laundering through KYT (Know Your Transaction), enhancing user trust and protection on the exchange. Due to these advantages, DBOE is considered a promising project in the cryptocurrency market. Investors can use the European options fully flexibly and comprehensively, thanks to DBOE's approach to trading options.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.