Dapp 101 — #1 Opium Protocol
Everybody, please welcome Andrey Belyakov, founder of Opium Network, to our Twitter AMA series!
Opium protocol is a universal protocol to create, settle and trade virtually all derivatives and financial instruments in a professional and trustless way.
It allows anyone to build custom exchange-traded products on top of the Ethereum blockchain. Once created, they can be traded freely via a network of relayers and will be priced according to supply and demand.
Opium’s Founder & CEO — Andrey Belyakov has joined us today to answer our questions.
We’ll start with some introductory questions to provide some background about project, their current focus areas & then there future plans in general. 😊
Welcome, Andrey! 👋
Q. Can you please tell me something about yourself and what is your background?
A. Hi, my name is Andrey Belyakov, I’m a member of the CFA Institute, used to be all my life a professional derivative trader and fund manager with 30 billion EUR AUM portfolios. I am the founder of the Opium Team, The Art Exchange, and a private venture investor.
Q. How long you have been in Ethereum space?
A. I’ve been exploring Ethereum from the beginning as I was an investor in Ethereum ICO. But first, it was just a hobby and then I decided to quit my job and go all over in blockchain space. Since then I spent almost all my time on “blockchain” innovations.
Q. When did you think of starting Opium & how you got the idea?
A. Opium started when we saw limitless opportunities and a huge ineffective financial market and a lot of potential and opportunities to change it and make it effective in the long term. And then we decided to create Opium because it’s time for innovations
Q. What is the problem Opium Network aims to solve?
A. Being part of the financial sector and seeing how non-transparent and costly it is to start trading derivatives. We want to give our users the possibility to start doing it with a couple of dollars to try it out.
Also, we aim to give users transparency that is missing in traditional markets and control of their funds.
Q. Why are derivatives so important?
A. Because derivatives allow you to take or get rid of any isolated risk in a very efficient way. If you have any knowledge and you are ready to take the risk you can make some nice return and vice versa you can get rid of the risk if you are lacking some knowledge.
It’s a global risk-trading market.
Q. Can you give us some examples of real-life derivatives that normal people use?
A. Everybody once in life traded derivatives. For example, when you buy insurance, you buy a derivative. The insurance company takes your risk and in case of this risk to realize, it will cover it for you.
And you pay an insurance company monthly or annually for taking the risk from you. Also, everybody’s bank accounts are hedged with a lot of different derivatives because banks just don’t give you money from somewhere.
Q. What can you do with Opium?
A. Opium is a protocol and Opium is also a derivative exchange platform. On top of the protocol, you can build derivatives in an hour; exchanges with any level of difficulty from easy ones to professional platforms.
On Opium Exchange and also Swap Rate we invite users to trade derivatives in an effective way and, moreover, list their own derivatives.
Q. What are you working on now?
A. We are building zk rollups to dramatically decrease any costs, to trade derivatives practically with no fees and faster than ever. Also, it’s on our plans to make it possible to trade with the speed of Visa/MasterCard.
Of course, new cool instruments would be added to the opium exchange and your ideas are welcome!
Q. How are your team dealing with a high gas price?
A. This is our next goal as we said to use ZK Rollups to proceed thousands of transactions that will be combined into one with no loss of security. On the other hand, we have Gas Price Options that allow people to buy and sell the risk of the gas price.
Q. Gas price options? What is it? How can someone use it?
A. Gas price options can be seen as insurance (just like you buy for your car or your dog). You can buy such contracts and also sell them depending on your initiative and predictions.
Everyone can use it, you just need to understand what you want to do: hedge or speculate and place an order using Call or Put Options.
Q. Are you going to list new derivatives? Can we list our own?
A. Yes, we are planning to add more interesting derivatives. We are open to new ideas! And yes as it is quite easy to add new derivatives on Opium Exchange, we decided to give this awesome opportunity to our users.
All you need is to go through a basic security check and answer a few questions in a special form.
Q. What price do one pay for derivatives?
A. There is an open market. You can buy or sell for any price you want. To do that we have order books. You place your order there and it will be automatically executed or not, depending on other market players.
Q. Why sometimes there is more and sometimes less liquidity?
A. Because we are a non-custodial platform and we don’t touch your funds or derivatives. We just create an infrastructure and other participants bring liquidity. Sometimes it can be us and other times it’s the other players.
A. More participants = more liquidity. You can always place an order to provide some liquidity.
Q What is the Swap Rate? Can it help me with interest rate fluctuations?
A. Definitely yes. Swap Rate is our first platform where you can trade Interest Rate Swaps. In simple words, it gives an opportunity to exchange floating rate for fixed.
So to receive a fixed interest rate from someone in return for this you will pay a floating interest rate. Fixed interest rate is always a subject of negotiations and you can do it via order books.
Q. If I don’t have a deposit or loan on Aave or Compound? Can I use Swap Rate?
A. Yes, you can trade even if you didn’t deposit or borrow money. if you can run into a good deal receiving a high fixed rate and paying floating which you think will be lower or the other way around you can make a lot of money on it.
Q. What are your plans for the next months?
A. We are planning to focus on our main projects, collect users’ feedback, and gradually implement it to make our platforms even better. Also, we are working on providing more information about derivatives.
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