Charm Finance – the decentralized options protocol – has launched their mainnet and users can start trading immediately. However, the contracts are still unaudited so proceed with caution.

https://twitter.com/CharmFinance/status/1351122364319281152?s=20

The Charm Finance team believes that their options protocol stands out from the rest as they have implemented a unique approach of splitting tokens into tokenized payoffs and using a prediction market AMM to create liquidity.

Doing so enables the following benefits:

  • Price is purely determined by supply and demand, no reliance on external oracles
  • Options can be sold any time before expiry
  • Options can be shorted
  • Low slippage
  • Options that expire in the money are automatically exercised
  • Positions are represented as ERC-20 tokens

To learn more about how this novel mechanism work, check out this in-depth post by the Charm team.

As part of a guarded launch, Charm is launching with a cap on total value lock on each of the markets that it supports. Currently, once the deposited amount reaches $100K the protocol will stop allowing additional deposits. New users will not be able to open additional positions until current users close theirs.

Charm Finance is offering cash-settled, European options during this initial launch. While there is no fee for closing your position or final settlement there is a 1% fee charged when users open a position. Chainlink oracles are still used for final settlement price as well.

Keep up with Charm by following their Twitter.