Premia Is Integrating Chainlink Keepers and Chainlink Price Feeds to Enhance DeFi Options
Chainlink Keepers will help us to automatically exercise options and automate the distribution of protocol fees, and will support our introduction of stop-loss and take-profit orders. Chainlink Price Feeds will be used to deliver high-quality price data for WBTC, ETH, LINK, and DAI to support real-time options pricing.
As announced in our latest community call, Premia V2 will be going live on Ethereum mainnet on November 1st. Along with this launch comes a plethora of improvements, some of which are supported by Chainlink’s suite of decentralized services.
How Premia Will Use Chainlink Keepers to Automate Key Protocol Functions
Chainlink Keepers utilize decentralized, low-cost off-chain computation to carefully monitor user-defined conditions and then trigger on-chain functions once these conditions are met. Chainlink Keepers are run by the same professional node operators that secure Chainlink Price Feeds, which currently secure tens of billions of dollars across DeFi.
Most notably, these node operators are managed by professional DevOps teams that have proven to be highly reliable during extreme market volatility and network congestion. Chainlink Keepers are also optimized for low cost by using a rotating node framework with automated failover, mitigating against price auction gas wars.
In short, Chainlink Keepers perform automated jobs on-chain whenever key conditions are met. Premia V2 will make use of Chainlink Keepers to support a few different protocol features.
One of the most exciting use cases for Chainlink Keepers on Premia is the automated processing of expired options. We know that traders are not always on top of their positions, often resulting in locked capital or unrealized profits. At Premia, capital efficiency is of utmost importance, and we considered it important to solve this problem.
Our solution is to use Chainlink Keepers to monitor the pools for options that have expired, and to automatically exercise these options for holders. We’ve also added a function to the
Poolcontract that anyone can call named
ProcessExpired. This will systematically process the next expired option in that Pool to unlock the collateral and payout exercise rewards. Easy peasy.
In Premia V1, fees were converted and dispersed to those staking their PREMIA/xPREMIA by any individual manually calling the
convert function on the
PremiaMaker contract. This isn’t very user friendly as rewards were dispersed quite randomly. In V2, those days are over thanks to Chainlink Keepers. Once a day, Chainlink Keepers will automatically check to see if there are enough collected protocol fees to distribute. If the conditions are met, the Chainlink Keepers will sell the accrued fees for PREMIA, and distribute those tokens to the staking users on the platform (xPREMIA holders). No more digging around on Etherscan.
Stop-Loss and Take-Profit Orders
Coming soon to Premia V2 protocol are stop-loss and take-profit orders, powered by Chainlink Keepers. Our front-end interface is being updated to allow for users to set orders in advance to automatically exercise (or sell) options at a specified future time or underlying price. This feature will effectively allow users to “set-and-forget” their options positions after purchase, and be assured they will be executed according to their order. Keep in mind, this will require users to either pre-pay the gas for their sell transaction, or for a community Keeper fund to be created and maintained for this purpose. We will work with the community over the coming weeks to ensure the best possible solution is utilized by the protocol.
How Premia Will Use Chainlink Price Feeds for Real-Time Options Pricing
Chainlink is the industry standard for providing up-to-date, real time decentralized Data Feeds. With Premia looking to set the standard for decentralized options, it would be doing the Premia community a disservice to use any provider other than Chainlink for Premia’s price feeds.
We are happy to announce that Premia will be utilizing Chainlink Data Feeds to provide real-time pricing for the supported assets on the Premia V2 marketplace. With the launch of V2, this will include WBTC, ETH, LINK, & DAI, with more to come.
Premia looks forward to continuing to integrate with Chainlink services to provide best-in-class products and user experiences, not just for Premia, but for all of DeFi! While you await Premia’s V2 mainnet launch, please take the time to read up on our Volatility Surface Oracle being released through the use of Chainlink nodes.
Thank you for supporting us, and we’ll see you all in two weeks.
Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.
Premia is a next-generation options AMM with a heavy focus on UX, that enables best-in-class pricing based on market volatility, bringing fully-featured peer-to-pool trading and capital efficiency to DeFi options. Premia is developed by an experienced team of financial engineers, statisticians, and options traders that understand the deep intricacies of decentralized markets. Premia’s state-of-the-art pricing model ensures fair pricing for buyers and sellers based on the market’s supply and demand, while utilizing a continuous on-chain reinforcement learning algorithm to converge to the optimal market price and liquidity utilization rate.