3. Why choosing Option Panda?
Option Panda has many advantages against other option trading platforms.
- Scalable: Option Panda is a decentralized exchange which enables crypto asset traders to trade against each others’ price trend perspective regarding a certain underlying asset. Option Panda is scalable both in terms of crypto asset classes and expiry dates. Three underlying assets (BTCB, ETH, BNB) are listed for option offerings at the initial launch, with five available expiry durations, 5 minutes, 15 minutes, 30 minutes, 45 minutes, 1 hour, respectively. On Option Panda, actually it’s quite simple to offer options for a new underlying asset, with any expiry duration. The power of deciding whether more assets or expiry durations should be provided is owned by Option Panda Community. We’ll later announce our new asset listing and governance rules.
- Convenient: Option Panda automatically settles expiring options and updates new option offerings according to transparent rules(refer to “10. What is Option Panda’s option underwriting mechanism?”). Option holders don’t have to tower-watch and manually exercise their holdings through smart contract interaction. Option buyers simply buy a call/put option on the platform, waiting for its settlement for prospective profit; option sellers simply deposit underlying asset to a pool to participate in a pooled option underwriting, collecting premiums paid by option buyers.
- Transparent & Fair Pricing: Option Panda adopts a transparent option pricing mechanism. As there is no scientifically accurate pricing model for options, it’s unfair to claim that any pricing mechanism is fair to everyone. One can only claim that the price is accepted and willingly taken by someone. However, Option Panda strives to do its best to create a technically fair option pricing mechanism. Please refer to “11. How the price that I have to pay to buy an option is determined by Option Panda?” for more information.
- Dynamic Sigma Adjustment: Option Panda employs a novel dynamic adjustment mechanism based on market supply/demand to achieve a relatively frequent update of the implied volatility in the option pricing formula, which we call it Dynamic Sigma Adjustment. It is designed this way so that the frequent, market oriented Sigma(volatility) adjustment could reflect the market supply/demand trend and achieve a practically fair option pricing for both the buy and sell parties. Please refer to “13. What is Dynamic Sigma Adjustment?” for more information.
- Community Driven: Option Panda plans to gradually transfer the governance ownership to the community, and let platform tokens holders to decide it’s roadmap. That means Option Panda will have a decentralized governance mechanism.