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Liquidity Providers (Hedgers)

Hedger Section: Clarifications & Caveats

The Hedger section of our guide is crafted with a singular goal in mind: to provide a fundamental understanding of the hedger's role in the SYMMIO system to MarketMakers, Investors and everyone who is interested in becoming a Hedger himself. However, it's essential to note a few key points about the information it provides.
  1. 1.
    Educational Use: The Hedger section is educational and not a comprehensive reflection of the entire Symmio protocol. It is structured to provide an introductory grasp of what it means to be a hedger and offers a primer on how one can undertake this role.
  2. 2.
    Avoid Misconceptions: Some readers may draw the inference from this section that the Symmio system depends on Hedgers hedging themselves via risky off-chain actions, leading to assumed trust dependencies on the Hedger side. However, this understanding is incorrect and could potentially lead to erroneous interpretations of the system's operation.
  3. 3.
    Top-Down Relationship: To reiterate and clarify, the relationship between a Hedger and the Symmio protocol is a top-down one. This means that whatever actions a hedger takes off-chain have no bearing on the on-chain events. Thus, there are no trust assumptions regarding the hedger side of things as they use off-chain systems to hedge themselves or the connection between these offchain systems and SYMMIO itself.
  4. 4.
    Independent On-Chain Contracts: The Symmio contracts function independently of any off-chain actions performed by a hedger. They operate exclusively within the on-chain environment, and are not influenced or impacted by any external actions.
  5. 5.
    The SYMMIO system is fully isolated: Symmio is fully isolated by any issues that may or may not arise from using offchain systems, centralized exchanges, trading desks or any other forms of hedging.
We strongly recommend you to familiarize yourself with these points for a better understanding of the Hedger's role and its interaction with the Symmio protocol. It's important to interpret the Hedger section in light of these clarifications to avoid misrepresentations of the Symmio protocol's actual functioning.

SYMMIO offers a unique opportunity for LPs

SYMMIO, a protocol for on-chain derivatives trading utilizing peer-to-peer bilateral AMFQs or Intents (Automated Request for Quotations), has paved an entirely new way to trade derivatives on-chain, providing significant advantages to early adopter liquidity providers. As the protocol scales, its technological edge and first-mover advantage will become even more valuable, yielding significant rewards for early adopters in its expansion.
Our Protocol currently offers potential Liquidity Providers a unique opportunity to be part of this growth in the early stages.
The first Liquidity providers soft committed up to a $20 million open interest range & aims to scale from $20 million to $100 million by onboarding MMs and LPs by incentivizing early liquidity providers on top of the margins they can earn.
Hedgers provide liquidity and earn profits by closing the efficiency gap that on-chain derivatives trading still has to this day.
The first Hedgers was earning up to 250% APR on their CEFFU-secured stablecoins deposits.

Market potential

On-chain derivatives present a potential trillion-dollar market.
Currently, the Market anticipation for on-chain derivatives is mimicking the market saturation of Spot on-chain trading prior to uniswap v2 launching.
Onchain DEX trading volume vs CEX trading volume in June 2020 around 1.7% right before Uniswap v2 launched in August.
Utitled

The DEX vs. CEX volume 2 months before Uniswap v2’s launch.

Uniswap's V1 version was a proof-of-concept first launched in November 2018 and later improved with the introduction of the V2 version in August 2020. Back in June 2020, only 1.69% of the global spot trading volume was done on-chain.
Only 2% of crypto derivatives trading currently occurs on-chain.
Today, a similar market potential exists in the on-chain derivatives trading sector, where only 2% of crypto derivatives trading currently occurs on-chain.
This presents a substantial opportunity for SYMMIO to capture a significant market share in crypto and traditional derivatives. With its innovative, AMFQ instant settlement technology, SYMMIO is uniquely positioned to become the Uniswap v2 equivalent for on-chain derivatives, revolutionizing the industry and offering exceptional growth potential for early investors.

First mover advantage

We offer Market Makers the exclusive opportunity to become one of the first liquidity providers on SYMMIO. By joining SYMMIO, you will be providing liquidity for a new trading primitive
  1. 1.
    First-mover advantage: As the first liquidity provider on SYMMIO, you will enjoy a competitive edge over others in the rapidly growing on-chain derivatives market.
  2. 2.
    Technological superiority: Our platform's technological innovations create a tangible lead in the market, distinguishing SYMMIO from its competitors and offering you a unique advantage as a liquidity provider.
  3. 3.
    Low-risk profile and risk protection: SYMMIO architecture ensures a low-risk investment opportunity, allowing you to invest your capital and benefit from this groundbreaking platform. At the same time, keep your funds on a trusted custody service (like CEFFU) or other institutional MPC-based trading desks.

Even more efficient.

Since quotes in the SYMMIO system are committed off-chain to frontends by hedgers, Liquidity Providers do not need to lock any capital on-chain until they receive a trade request from a user. This allows hedgers to bright platforms and farm with idle capital on various platforms, such as Aave, while waiting for new orders. This increases the efficiency of the platform and yield generation even further. Capital on demand can be withdrawn from Aave and deposited into the platform's on-chain contracts. Liquidity is unlocked.

Composability of SYMMIO

On the SYMMIO (https://cloverfield.exchange) MVP, we integrate Binance liquidity on-chain via our system. This enables on-chain users to trade on Binance Futures liquidity for approximately 200 crypto assets.
For providing liquidity on SYMMIO today, there are two options:
Option II Invest capital into existing hedgers offering services & that use it to provide liquidity
  • Investors can inject capital directly into the current running hedger services. (private loan)
  • The Hedger would run all the services and software and manages maintenance.
  • Hedgers could offer a profit split of 70/30, 60/40, 50/50, or 40/60 that can be negotiated based on the size of Liquidity commitments. (for example, at 250% APR generated after 30 days, using a 40/60 split, up to 100% of generated APR would be paid out on stablecoin deposits).
Option II. Become your own Hedger on SYMMIO
To begin Hedging services on SYMMIO, you need to follow these steps:
  • Set up your trading entity or use an existing one.
  • Run a hedger software. (maintenance can be complex at this stage.) The trading software can become outdated during upgrades; it must maintain its up time after any potential future updates to the core software.
  • Obtain an institutional Exchange account.
  • Have trading capital to deposit on the contract side and Binance to provide incoming trade requests.
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