Kibo Finance: An Alternative Option for Trading
It is often heard that some people still regret not having bought Bitcoin back in 2013, while in the summer of 2021 meanwhile, another group has been grieving that they made a poor choice of stepping into cryptocurrency this April. Timing is always essential, and the extremely volatile nature of crypto assets just makes it even more important to investors.
With the emergence of decentralized finance (DeFi) within the crypto industry, cryptocurrencies have been offered the capability to develop a financial system of their own that can now rival the traditional financial system. Similar to how critical timing is for crypto investors, timing is also one of the major parameters that dominate investors’ satisfaction in traditional finance. To shield investors and traders from losses, a specific financial product called options trading has been created. Since decentralized finance is sort of competing against the traditional one, is there a certain product in the crypto world? Kibo Finance might be just filling the blank.
Kibo is a multi-stage options protocol allowing trades on virtually any underlying asset and bespoke series like cryptocurrencies, stocks, and gold. It provides a purely peer-to-peer version of options trading where users can bypass going through a financial institution.
Here is some “Options Trading 101” in case it’s necessary: Options are conditional derivative contracts that allow the options holders (buyers of the contracts) to buy or sell a security at a chosen price. The option buyers must be charged an amount called a “premium” by the sellers for such a right. The option holders will leave the option expired worthless when the market prices are unfavorable for them, thus ensuring the losses are not greater than what they have paid for the premium. On the contrary, option sellers assume more potential risk than the option buyers, which is why they demand the premium. There are “call” and “put” options. With a call option, option holders purchase the right to buy the underlying asset in the future at a predetermined price, called exercise price or strike price. With a put option, option holders acquire the right to sell the underlying asset in the future at the predetermined price. The operation that option holders decide to buy or sell the assets is called exercising the option.
Among other decentralized financial products, such as staking and yield farming, crypto options trading is climbing up on the ranking list to be one of the most popular financial products on crypto exchanges these days. Why? Because it, to a certain extent, successfully frees investors and traders from the risk resulted from bad timing. As it is intuitively stated in the above 101, options trading allows investors and traders to speculate on the future price of an asset and make a profit off of it. It also protects against potential losses in the portfolio.
In the new finance system, consisting of cryptocurrencies, options trading is a good way for investors and traders to benefit from the extreme volatility of cryptocurrencies. The original intention of Kibo Finance is to provide a platform wherein investors and traders are allowed to buy and sell call options of assets at a strike price of their choices from the liquidity pools.
As an incentive mechanism for liquidity providers, Kibo’s unique engineering technology allows liquidity providers on the platform to earn up to 10 times more reward and receive Kibo Token as a reward from the very first trade itself, ensuring liquidity providers receive the maximum return of capital is at the core of Kibo’s design. Kibo Finance uses a dedicated option pricing oracle that initializes its bounded curve AMM in its V1 so that the price offered at the end is determined by the function of available liquidity, which guarantees users that they will always receive the fair market price.
Through the mentioned above, Kibo Finance rewards liquidity providers to maximize their capital while maintaining fair prices, creating a frictionless market with highly efficient liquid options trading for investors and traders in the crypto space.
Kibo Finance has been concurrently making continuous progress in its initial stages of development. With decentralized finance taking growing shares of the mainstream market, a dedicated options trading platform with over 10 times rewards could be a win-win for everyone.
According to the roadmap, Kibo Finance is about to launch their V1 in Q4 of 2021, in addition to which Kibo AMM and stock trading will be available as well. In the upcoming 2022, Kibo also plans to launch its V2 and various financial products like Option Strategies for users along with Trading Bot and Analytics Bot. There is also a full-fledged Kibo Institute launching approximately around Q2 of 2022. Although Kibo Finance is an embryo, the project itself has an eventful roadmap to actualize all these ambitious goals. From the perspective of decentralized finance users, they should get prepared to make the best profit out of these emerging lesser-known financial products, rather than flooding into a little bit overexploited yield farming and staking.
