The base layer of PREMIA V3 is a complete rework of the protocol, focusing on capital efficiency in the decentralized finance (DeFi) options exchange. Here's a summary of the key components:
- Concentrated Liquidity: Allows liquidity providers (LPs) to create positions in specific option pools with defined price bounds. It enables both active and passive traders to maximize fee collection and capital efficiency.
- Partial Collateralization: Introduces margin architecture, enabling partial collateralization of options for select payoffs like spread strategies. This facilitates greater liquidity and more efficiently-priced assets while maintaining solvency and eliminating counter-party risk. (Enabled at a later date - ETA Oct 23)
- Transaction Fees & Liquidity Mining: Traders pay fees and split between LPs and protocol stakeholders. Users can stake PREMIA tokens to collect fees and direct liquidity mining rewards.
- Vaults & OTC Liquidity: Addresses challenges with granular options markets.
- Modular and Layered Protocol: Designed for maximum composability and upgradability on top of the primitive base exchange layer.
- European-style Options Markets: Enables the creation of European-style options markets for any asset pair with an on-chain spot price oracle.
- Range Orders: Supports different types of range orders, such as Sell-with-collateral, Buy-with-shorts, Buy-with-collateral, and Sell-with-longs, each with specific functionalities.
- Margin System: Using a risk-based model to assess user positions, blends attributes from traditional Reg-T and Portfolio Margin systems. Lending markets are established to provide capital to option underwriters. (Enabled at a later date - ETA Nov 23)