Where can I find out more about Charm?
Who owns Charm options?
Charm options, much like Charm itself, will be owned by the Charm community. Charm tokens (TBC) will allow community members to vote on governance matters related to Charm options.
A protocol for creating liquidity for decentralized options
How is Charm different?
Charm uses a unique automated market-making mechanism designed specifically for options trading on the blockchain, without the use of secondary markets or pricing formulas.
Why should i buy an option at Charm?
Charm have a largest selection of option in DeFi, and compared to other decentralized options protocols, many of the options are cheaper, more profitable, and have higher yields. The price performance is sometimes even better than Deribit.
Does Charm plan to offer markets in other tokens?
Yes, we will offer them based on community feedback. Join our Discord if you want to suggest new markets. We have started to include some of these markets in our new protocol at cubes.fi.
Who's writing the options?
An automated market-maker. You buy and sell options directly from the smart contract, not from other users.
Is the code a fork of any other project?
No, the codebase was written from scratch. The mechanism we developed is new and doesn't exist in other platforms so we implemented it ourselves.
What is price impact?
Price impact is the % difference between the price you buy and sell, and the price when the options were last bought or sold. As the trade size increases, price impact also increases - this is a fundamental property of automated market-makers that allows price discovery to occur.
How does Charm reduce price impact?
The underlying automated market-maker pools liquidity across multiple strike prices. This means for each option market, there'll be more liquidity and a lower price impact.
What happens when I buy an option?
You receive ERC20 tokens representing your options. By using the ERC20 standard, our options are composable and can potentially be used with other protocols.
What are the differences between call options, put options, and covered call options?
This will be explained (in plain English) before you buy an option. See our medium article for further explanations and examples.
What is the difference between the Trade page and My Options page.
Trade give you exposure to calls or puts. My Options allows you to close your exposure, or to collect your payoffs.
Are the options European or American style?
European style. Options can't be exercised early but the positions can be closed at any time to realize any gains.
Are the options cash settled or physically settled?
Cash settled. Your options will be exercised automatically if they expire in-the-money, so you don't have to worry about forgetting to exercise them.
What price index is used?
We use Chainlink price feeds. In the future, we plan to make the oracle more robust by taking the median price from multiple sources.
When is the exact expiry time?
8:00 UTC on expiration date.
What are the trading fees?
1% of the notional. For example, if you buy 0.5 ETH puts with a strike price of 1000 USDC your fees will be 5 USDC (0.5 *1000 *1%).
What are the risks?
There are the usual price risks of options. The value of an option is affected by factors such as the price of the underlying, implied volatility and time to expiry. There are also risks specific to decentralized options, such as bugs, contract hacks, economic attacks and oracle manipulation. This project is still in beta so use at your own risk - you can lose up to 100% of your funds with no recourse to compensation, so please only deposit funds you are willing to lose.
Is the code audited?
No, this project is unaudited. Use at your own risk. A older version of the codebase was audited by Solidified, but we've added many new features since then. There is a bug bounty for Charm options to ensure the code base is continuously scrutinised by the cybersecurity community.
How does Charm protect users?
Charm protect users by placing restrictions on the total value that can be deposited into the smart contract; and include a full description of all the risks and rewards before users buy an option. In addition, we are also working on getting an insurance, security audits, and launching bug bounties.