Dopex is a decentralized options protocol on Arbitrum which aims to maximize liquidity, minimize losses for option writers and maximize gains for option buyers - all in a passive manner for liquidity contributing participants. Option Pools allow users to earn a yield passively by providing base asset and quote asset liquidity for users who'd like to buy call and put options respectively.
Dopex makes use of option pools allowing anyone to earn a yield passively by selling options to purchasers with minimal interaction with the protocol. Pool participants can simply deposit base or quote assets to a pool which would be utilized as liquidity to users looking to purchase call and put options. At the end of every epoch (weekly or monthly), pool participants would be able to collect their share of pool holdings including premiums paid for all options relative to the size of the pool as well as $DPX token rewards at the initial stages as an incentive for providing liquidity.
In-case of losses incurred by the pool when purchasers make a net profit on their option purchases, pool participants would receive rebate tokens - $rDPX - which would be minted equivalent to 30% of all losses incurred by the pool.
There are also Volume pools created for the purpose of boosting volume within the protocol by offering a 5% discount on all option purchases made using volume pool funds. Volume pools allow users to deposit funds prior to weekly global epochs and use funds from the pool to purchase options from any option pool at a 5% discount. Volume pools create an arbitrage opportunity for sophisticated option traders purchase options at a discount and immediately arb them against other exchanges for a quick profit.
Volume pool depositors are also given $DPX token rewards at the initial phases to further incentivize pool usage. At the end of every epoch, users can withdraw any excess funds from the volume pool - however they would have to pay a 1% penalty at withdrawal for non-usage of funds. All penalties are withdraw-able by $DPX governance token holders in the form of protocol fees.
Dopex makes use of two tokens for the protocol to work in a synergistic manner:
- $DPX - vanilla governance and protocol fee accrual token
- $rDPX - rebate token
$DPX is the limited supply governance token for the Dopex protocol and is used to vote on protocol and app level proposals. Apart from being a vanilla governance token, $DPX also accrues fees and revenue from pools, vaults and wrappers built over the dopex protocol after every global epoch. Total Supply of this token will be 500,000 (500k).