Divergence DIVERPrice $ 0.00437

Divergence is a decentralized platform for hedging, trading DeFi-native asset volatility, with its flagship product being an AMM-based marketplace. Divergence is developing a range of decentralized volatility derivatives and volatility index products with the aim of becoming the go-to platform for: 

• Risk-averse users seeking to hedge volatility risks 
• Risk-tolerant users seeking to trade and gain leveraged exposure to volatility 
• Risk-neutral users seeking to participate as liquidity providers and earning fees.

The extensive volatility derivative product suite in the Divergence roadmap contains financial instruments including binary options, index derivatives, and yield vaults incorporating volatility trading strategies. Our first step is to create a user-friendly, immediately scalable product that directly addresses the needs of liquidity providers and traders in the DeFi ecosystem: an AMM-based marketplace that trades synthetic derivative tokens with a binary pay-off structure on the volatility of any LP-defined asset class (aka. binary options).

Key design features for this AMM marketplace include:

• Composability: Markets can be created at strike prices and expiration cycles of choice, using any fungible token -- including DeFi assets issued by other protocols -- in a one-step seeding and minting process, meaning that you don't need to mint a derivative token first, then allocate funds to seed a pool
• Capital Efficiency: Only one collateral is required to write a binary call and a binary put for a pool, with no need for over-collateralization. Once a pool is created, the same collateral is used when traders buy and sell options via this pool. At any given time, only one collateral is used per pool. The smart contract reserves max claims for collateral, providing LPs the flexibility of withdrawing capital prior to expiry
• Continuity: By default, our binary option pools auto-exercise positions and roll over the liquidity automatically upon expiration using identical terms. LPs would not have to relocate capital to create new pools in order to manage option expiry cycles.