Base Layer (Exchange)
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The base layer of PREMIA V3 is a complete rework of the protocol, focusing on capital efficiency in the decentralized finance (DeFi) options exchange. Here's a summary of the key components:
Concentrated Liquidity: Allows liquidity providers (LPs) to create positions in specific option pools with defined price bounds. It enables both active and passive traders to maximize fee collection and capital efficiency.
Partial Collateralization: Introduces margin architecture, enabling partial collateralization of options for select payoffs like spread strategies. This facilitates greater liquidity and more efficiently-priced assets while maintaining solvency and eliminating counter-party risk. (Enabled at a later date - ETA Oct 23)
Transaction Fees & Liquidity Mining: Traders pay fees and split between LPs and protocol stakeholders. Users can stake PREMIA tokens to collect fees and direct liquidity mining rewards.
Vaults & OTC Liquidity: Addresses challenges with granular options markets.
Modular and Layered Protocol: Designed for maximum composability and upgradability on top of the primitive base exchange layer.
European-style Options Markets: Enables the creation of European-style options markets for any asset pair with an on-chain spot price oracle.
Range Orders: Supports different types of range orders, such as Sell-with-collateral, Buy-with-shorts, Buy-with-collateral, and Sell-with-longs, each with specific functionalities.
Margin System: Using a risk-based model to assess user positions, blends attributes from traditional Reg-T and Portfolio Margin systems. Lending markets are established to provide capital to option underwriters. (Enabled at a later date - ETA Nov 23)