Brokers (Frontends/Subnets) are only as strong as the products they can provide
While we rely on third parties to deliver our products to end users, we fully understand the important aspects of achieving product-market fit for a derivatives engine with maximum efficiency.
There is already 1000 perp DEXs How is SYMMIO different?
The way SYMMIO approaches PMF is slightly different from how other derivatives platforms have done this in the past.
Strategy of currently existing DEXs
Traditional derivatives platforms alongside centralised exchanges are tackling this problem in a way where the team behind the exchange will come up with all the products, fees, speed of execution, and also the risk engine, while market makers come in and only provide liquidity & being responsible to dictate the spread. (This is more similar to a permissioned exchange).
SYMMIO — △/ACC
SYMMIO approaches this problem through a free market system, instead of having a team implement and being responsible for the most important aspects of the exchange, SYMMIO gives all the tools to the Solver (Market Maker) directly, meaning they can now create products themselves, while also being responsible for execution, selecting the best risk parameters and therefore also operating their own risk engine, while providing users an insurance fund if something goes wrong. Market Makers are then all competing with each other to come up with the most interesting products, best execution speeds, most applicable risk parameters and engine, as well as providing the biggest insurance fund to give their counterparties comfort. This creates an infinitely accelerating velocity and, once kicked off, can easily outpace everything that exists, similiar to a blackholes “Singularity”
The △/ACC BlackHole (not flywheel)
Solvers/Market Makers offering novel products at good market rates will continue to lead frontends onboarding more users, more users lead to more sophisticated solvers being interested in offering more interesting products, which leads to frontends onboarding even more users.
Examples for interesting products currently being researched / implemented by the “few” solvers that we already have onboarded:
- Whole CEX Futures Market
- Memecoin Beta Strategy, to offer access to memecoin perps in co-operation with BACKED vaults.
- Impermanent Loss protection / Custom Gamma Hedging Strategies serviced to all DEXs — What are Gamma Hedging strategies? Mazett explains it here.
The underlying Strategy / Thesis is simple:
More solvers will bring more ideas, which will lead to more products, which will attract more frontends/exchanges and therefore users, and within all of that SYMMIO is even more attractive for Market Makers than traditional exchanges, once they realise that they can offer their own structured products without taking any responsibility of execution or user funds.
Value2Effort Chart
After all derivatives users/traders interest can be broken down to a few core things:
- More product offerings (perps on meme coins, derivatives on future tokens, leverage trading of points, and many many more.)
- The best liquidity (low price impact, high notional possible)
- The best spread / fees
- Fast execution
- Better risk parameters (less maintenance margin, less initial margin, higher leverage)
- Better Risk engine (allows for same things as risk parameters, but protects from insolvency (the ability to pay profits)
- Insurance Fund (in case the risk engine fails, is there funds to compensate?)
Taking the above metrics for us to measure derivatives protocols and consider this as value. You can simply measure this alongside effort;
Looking at this diagram it should become evident that a modular derivatives system like SYMMIO underperforms when there are only a few solvers, while it immensely overperforms once there are many, and accelerates value to infinity once a critical mass is reached.
Solver2Solver interactions will then accelerate SYMMIO to become a core pillar of the financial industry as initially described in our long-term vision section in our gitbook here.
Difference between Intent-Based systems for Spot / Crosschain & Intent-based Derivatives (SYMM):
There is a significant difference between a Solver-based spot system and a Solver-based derivatives system.
The difference comes from Spot solvers only competing on a single metric (price) while derivatives solvers compete on any variable that adds value to users. More solvers in spot-based models are not ultimately leading to a better system, that’s why spot-based derivatives are forming more of an oligopoly, which could ultimately lead to a worse price. Explained well by Tarun here.
In derivatives, Solvers are competing on a lot more metrics than price, and actually are competing on creating their own distinct products, which leads to a free market dynamic.
SYMMIO allows for generalised derivatives, similar to how Ethereum allows for generalised, decentralised applications, contrarian to Bitcoin’s narrow usecase (transfer of funds, sorry ordinals).
Conclusion
By giving solvers the tools to create their own products, we are creating a generalised derivatives platform, similar to how ethereum gave developers the tools to create general decentralised applications (which are highly computational integrated with each other), SYMMIO gives market makers the platform to create general decentralised derivatives (which are natively financially integrated with each other).
Figure 3:
- Solver 1 could run a delta-neutral strategy where each user trade is 1:1 hedged on a centralised venue.
- Solver 2 One market maker could create a protocol that trades against their traders beta-neutral with his own capital quoting prices based on an internal algorithm (almost like simulating a local orderbook or B-Book).
- Solver 3 could create a protocol that deploys a vault where users could deposit that is used to settle uPnL of traders (similar to GMX or SNX).
- Other Solvers can come up with any other structured product and offer it through SYMMIO.
The benefit of structuring & clearing products through SYMMIO,
instead of creating their own protocol from scratch, the benefit of clearing through symm is that the settlement process (Liquidators, Oracles, Collateral) is streamlined, meaning all derivatives are instantly integrated into the broader ecosystem, can be easily offered to integrators / brokers / subnets and can also be used as cross-margin internally, this will solve the fragmentation & fungibility problem of derivatives.
This basically means Solvers can create structured products & offer them to the end user or other solvers to close an arbitrage opportunity or hedge themselves.
