What is Opium Protocol (OPIUM) | What is Opium Protocol token |What is OPIUM token

Opium is a universal and robust protocol that allows for  creating, settling, and trading any decentralised derivative.

What is a derivative and how do they work?

Alice and Bob are two counterparties with different views on the price of gold.

Some users of derivatives speculate on price movements, and others hedge their risks. Alice thinks the price of Gold will go up. Bob thinks the price will go down. They both place a margin of 20% in a contract.

In this example, the contract will expire in 5 months.

By that time the price will have gone up or down. Derivative contracts on Opium Protocol can only be executed at maturity, but positions can be traded on secondary markets or transferred to other wallets.

At maturity (in 5 months) the price of gold went down 15% relative to the price of the futures contract.

If Alice had a long position and Bob had a short position, Bob would receive both his full 20% margin as well as 15% of Alice’s margin. Alice will only receive back 5% and lose 15% to Bob since her view on the market was wrong.

Why is Opium the best protocol for

creating and operating derivatives?

• Create any derivative with just a few lines of code. The Opium Protocol takes care of the rest.
• Use any oracle to provide the price of the underlying asset: On-chain (eg. Uniswap, Chainlink) or off-chain (multisig manual input).
• Every derivative is represented by a token that can be traded on secondary markets fully trustless.
• Opium Protocol is designed and built by a team with professional finance expertise, but usable by anyone.
• Anyone can construct derivatives with custom parameters and oracle solutions.
• Use any stablecoin or ERC-20 token as collateral.
• Opium is a consistent framework that is similar to professional markets.

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