What is Premia Finance (PREMIA) | What is Premia Finance token | What is PREMIA token
Premia is a collection of DeFi Smart Contracts on the Ethereum Blockchain delivering Financial Instruments as a Service to Users. Premia Phase 1 will look to deliver functionality to underwrite financial contracts traditionally known as Physically Settled, American Style, Covered Call and Put Options.
Premia & The ERC-1155 Multi-Token Standard
While Premia was exploring ways to implement our vision, ERC-20 and ERC-721 standards unfortunately were not flexible enough for our needs. Luckily, we have extensive knowledge of the ERC-1155 token standard & we are happy to share the reasons we built our launch features around this standard below.
ERC20 — Single Smart Contract per Token
ERC721 — Single Smart Contract that Mints One-Of-A-Kind NFTs
Secondary Marketplace Needs
To Create a Fungible/Liquid Secondary Market for Options Contracts the ERC1155 Standard was best fit for purpose.
More Information Here: https://eips.ethereum.org/EIPS/eip-1155
Traditionally used for transferable & fungible game assets and artwork, ERC1155 allows for a single smart contract to mint a multitude of tokens with various levels of specifications. It allows for many unique tokens (options in our case) to be created from the same smart contract, however allow for each contract to hold its own unique parameters/identifications that are tailored to the distinct options contract.
Pseudo Securitization
Premia utilizes ERC1155 for the securitization of covered options contracts where the token collateral is locked up with the smart contract until either expiration, exercise, or early cancellation (if not sold). The Premia Options Minter was constructed to be able to write Options for any Token Denominated in either DAI/WETH/WBTC. At Launch we will have whitelisted many Tokens selected amongst the well-known DeFi Protocols written against the DAI denominator.
By using the ERC1155 Token Standard we can verify that each option minted is uniform to all other like options of its kind i.e. maintain the same expiration/strike price and can be exercised for a like amount of of the underlying asset as deemed within the specifications of the options contract.
To Address the lack of divisibility that the ERC1155 standard inherently holds, we have created a simple mathematical log function that maintains a low barrier to entry in writing options contracts that is set at the Token Level.
For Example:
Options Written for WBTC/DAI will have Strike Price Increments of $100 DAI in Lots of 0.001 WBTC per Contract. (~$6 Per Contract)
Options Written for WETH/DAI will have Strike Price Increments of $10 DAI in Lots of 0.01 WETH per Contract. (~$24 Per Contract)
Options Written for AAVE/DAI will have Strike Price Increments of $1 DAI in Lots of 0.1 AAVE per Contract. (~$7.7 Per Contract)
Options Written for LINK/DAI will have Strike Price Increments of $0.10 DAI in Lots of 1 LINK per Contract. (~$11 Per Contract)
Options Written for CRV/DAI will have Strike Price Increments of $0.01 DAI in Lots of 10 CRV per Contract. (~$4.6 Per Contract)
As you can see Contract Values maintain a standard pricing range so that accounts of all sizes can participate, whereas in traditional markets all contracts are sold in lots of 100 shares per contract.
Transactional Gas Cost Reduction
The ERC1155’s inherent nature allows for multiple contracts to be written, transferred, traded, exercised, etc in one transaction, saving on gas costs and allowing for quality of life improvements for all platform users.
Another benefit of the ERC1155 standard is that it allows for the minting of new contract types (as long as they fit within the standard specifications) without the need to deploy any additional code or smart contracts. The first contract will cost ~300k in gas to store variables in EVM Storage, with all concurrent options created costing ~100k gas per transaction. We believe this to be the best approach for end users in terms of usability and reduction in transactional gas costs.
ERC1155 allows users to approve all Premia made options contracts via a single Approve All transaction if desired, so that as users continue to utilize the platform they are not subject to approval transactions for each new contract you may buy/trade/exercise, which can be burdensome and costly with other protocols.
External Marketplace Support
Premia will be providing a marketplace at launch to trade these options, however because our options contracts adhere to the ERC1155 standard they can also be sold on other marketplaces that support ERC1155 such as OpenSea. Although not a priority at launch — our tokens metadata can be easily retrieved so that the external Storefronts can gather necessary details of the options contract to display on their site. (Our options contract specifications are held within the Smart Contract itself which other secondary marketplaces need to be calibrated to retrieve, thus we will be providing JSON files that they can utilize to retrieve this information easily)
What is the PBC?
After months of intense work the protocol is live! The Premian Republic is proud to announce the release of Premia Options & Secondary Marketplace. The decentralized options protocol we have built is now open to all!
We welcome you to take part in our launch event, the PBC.
What is the PBC you may ask?
The PBC or Primary Bootstrap Contribution is a method to participate in the future of Premia. Utility tokens are often used as the underlying fuel for accessing features of a dApp and is a way to collect Premia to gain access to exclusive rights and features available at Launch.
_Contract Address : _https://etherscan.io/address/0x67aEe3454d5F82344d58021179830A3bb2245C11
How it Works?
Users contribute ETH to receive Premia Utility Tokens, all contributions are final. Upon the closure of the PBC (7 days), all tokens are split according their pro-rata amount of ETH contributed. For example if two user contribute ETH, User 1 contributes 75 ETH and User 2 Contributes 25 ETH, then User 1 will receive 75% (7.5mm Premia Tokens) and User 2 will receive 25% (2.5mm Premia Tokens) at the conclusion of the PBC period.
How much Premia Tokens will be allocated?
10mm Premia Tokens (10% of Supply) will be allocated. The remainder will be used according to the documents provided previously ( https://ipfs.io/ipfs/QmV2zd1h4VwycVg7VjCdnQEiyEdGKTzQzDsMaoU3YhaT3U)
How long will it last?
The PBC will end at approx. Monday 15FEB2021 at 00h01 UTC.
Can users contribute more than once?
Yes users can come back at anytime during the PBC period to contribute additional ETH.
Who can contribute to the PBC?
Users should consult with their local financial/legal advisor for any guidance prior to contributing to the PBC. The UI of premia.finance will not allow users residing in the US or OFAC listed countries. The content here is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by this website or it’s creator or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
Further disclaimers regarding the PBC can be found within documents provided previously ( https://ipfs.io/ipfs/QmV2zd1h4VwycVg7VjCdnQEiyEdGKTzQzDsMaoU3YhaT3U)
How do users receive their Premia Tokens?
At the conclusion of the PBC users can return and claim their Premia Tokens.
Why is the Premia Token needed?
The Premia Token is used to receive a pro-rata amount of protocol fees proportional across staked Premia (if voted in by the DAO to be paid in Premia) to reduce protocol fees paid, as well as partake in governance decisions.
Interaction Mining & More
Understanding Interaction Mining
Interaction Mining is a form of liquidity mining that rewards users of the platform. Every time a user Writes/Exercises/Buys/Sells an option, protocol fees are paid. The amount of protocol fees uses is dependent on if the user is using a referral, as well as the amount of xPremia that is locked up at that time.
For every $1 in protocol fees paid, the user is rewarded ~1 uPremia (Uncut Premia). This is determined by a manual price feed of the underlying asset that is updated by the Premian Republic once per week, via a batch script that utilizes price feeds via Coin Gecko.
uPremia is a non-transferable token that’s sole purpose is used to mine the Premia emitted via Interaction Mining. uPremia is staked in the Mining contract and proportional to the amount staked, users are rewarded a fixed amount of Premia per block.
During the accelerated period which begins Monday 15FEB2021, 10 Premia per block will be emitted for approx. 7.7 weeks. Following the end of the accelerated period 4 Premia per block will be emitted for approx. 77 weeks. This only includes Covered Calls/Puts at this time, future incentives will exist as well.
Example:
User A has staked 10 uPremia in the Mining Contract, User B has staked 90 uPremia in the Mining Contract. Per block User A will receive 1 Premia, and User B will receive 9 Premia during the accelerated rewards period (10 Premia per block).
We believe Interaction Mining will be an effective method of rewarding users who use the protocol, and invite all to partake. The Premian Republic has put forth extreme diligence in the emission rates as to not dilute users who took part in the PBC, thus have spent significant time refining the rate of emission to a level that both properly rewards early users of the platform, as well as does not negatively impact Primary Bootstrap Contributors.
An Example of the inflation impact can be seen below for the first 12 weeks:
Protocol Fee Sharing and Fee Reduction
Regarding Fee Reduction it is dependent on the amount of xPremia locked up. Upon completion of the PBC and when Premia is distributed to Primary Bootstrap Contributors, those users can then choose to stake their Premia to receive xPremia - which represents their proportional share of Premia Protocol Fees returned in Premia (if voted in by the DAO). This mechanism is similar to xSushi, whereas protocol fees are sold via DEX into ETH, that ETH is then used to buy back Premia from the Bonding Curve and returned to staking users.
xPremia (now a payment in kind yield bearing asset) can then be staked for different time periods to reduce that wallets protocol fees paid. This incentivizes heavy protocol users to lockup their Premia to take advantage of this benefit while still receiving protocol fees. The Protocol allows users multiple levels of “Tiers” which coincide with different levels of fee reduction. The below table is the breakdown on each tier. Quantity on this table represents the amount of xPremia that has been locked up. The longer the user locks their xPremia the larger the bonus to their locked amount they will receive.
Lock up Bonus Multipliers are as follows:
1 Month = 1x, 3 Months = 1.25x, 6 Months = 1.5x, 1 Year = 2x
Example: User has Staked their 250,000 Premia (current Premia:xPremia rate = 1:1) and received 250,000 xPremia. That user then locks up their xPremia for 1 Year receiving a 2x Bonus. Their effective amount is thus 500,000 and they are entitled to the max fee reduction defined on the bottom row of the table.
At any point during the lockup period if the user wants to add additional xPremia to their lockup, this is allowed and the calculation will take into account the new bonus and effective amount, however they will reset their lockup period based on their time selection.
The top exchanges for trading in Premia are currently Uniswap (V2) and 1inch Exchange
Looking for more information…
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