Premia v2: Features
With the release of Premia v2 quickly approaching and audits starting to roll in, the Premia team thought it would be prudent to give a primer on the features of Premia v2 so let’s go through what the goods are:
AMM & Peer to Pool Architecture
Probably the most important feature out of the gate is the AMM, this peer to pool architecture will allow for better price execution on option trades as liquidity providers (LPs) and traders utilize the c-value and converge on a fair market price for options.
Previously, an option seller would have to write an option and an option buyer would have to buy that option. This manual selection process means that option buyers may be looking at options that don’t have the strike or expiration date they want because nobody has written the option they’re looking for.
Now with Premia v2, sellers are simply LPs who deposit their crypto assets (WBTC, WETH, LINK, DAI) and then option buyers can magically create their own options from the pool of assets. This is huge! The floodgates are opened for option buyers to have way more flexibility on their strikes and expiration dates while LPs can passively earn fees and rewards without actively managing or writing options monthly.
A set-it-and-forget-it strategy for LPs and a smorgasbord of available options for buyers: a match made in heaven (or made in Premia v2…same thing).
Liquidity Mining
At mainnet launch WBTC, WETH, and LINK call/put pools will be enabled. This means that users can provide liquidity in these tokens, or in DAI (to underwrite the put pools), to underwrite options on the Premia platform and earn yield.
Similar to how Sushi Onsen works, launch pools will be assigned allocation points. Each pool will be given a specific number of allocation points, these allocation points are used to determine the weighting of the rewards in each pool.
On launch, the weighting of all pools will be equal, but over time these allocation points can be used to incentivize specific pools that need more liquidity. This flexibility of adjusting allocation points will help create incentives for LPs, which in turn helps create the best execution prices for option traders. A win-win 🤝
This means that LPs will be incentivized by both option premiums and Premia tokens from our liquidity mining program.
For a deep dive on the new liquidity mining program, check out this Medium post.
Smart Deposit
New to Premia v2 mainnet launch will be something we like to call Smart Deposit.
Smart Deposit allows Premia users to automatically optimize their pool deposits to have the minimum impact on pool price levels. Users depositing into pools using this feature will automatically take advantage of Premia liquidity mining, no different from users depositing through the Pro Vaults interface. The Smart Deposit feature allows users to take advantage of Premia’s on-demand market pricing system to earn higher yield on average.
Users can also take advantage of the Smart Deposit interface to automatically swap from any asset they want to the required asset for a pool. This means you never have to leave the Premia platform if you need to swap assets.
Smart Deposits will lead to higher average profits for depositors, a rich backstop of liquidity, and an easy management experience for LPs.
DEX Swaps
Need to execute a trade while you’re developing your strategies on Premia v2? You might think you need to open a new tab and go to one of your favorite decentralized exchanges. If you’re anything like us though, you already have too many tabs open. We want to save you from opening yet another…
With Premia v2, you’ll be able to execute DEX trades without ever leaving premia.finance 🪄💎💱
Simply use the swap feature in Premia and we’ll check over 30 different DEXs to find the best trade for your pair. Click swap and you’re done. One less tab for you to open and this swap feature gets you back to trading options quickly.
New on mainnet launch, you can also swap from any asset you own into any pool or option on the platform. At the time of option purchase, you can select the asset you’d like to pay with and our protocol will automatically facilitate the swap between your selected asset and the asset required for that specific option pool.
This will allow users to have a one-stop platform for all of their token and option trading needs.
Option Positions as NFTs?
Yes! Inspired by Uniswap v3, Premia positions will be represented by NFTs which allow a user to transfer or sell their Premia option positions without closing out the underlying option.
The NFTs are dynamically generated and stored fully on-chain as SVGs, meaning there is no IPFS or centralized API dependency. Of course they’re also beautifully designed, so they should leave NFT enthusiasts thinking “wow, looks rare”.
Layer 2
Layer 2 won’t be live at Premia v2 launch but we are looking into Arbitrum as well as considering other layer 2 solutions like Optimism and zk-rollups.
Things we can do on layer 2 that aren’t possible on L1:
- Active vault strategies (Meta-Vaults!! 🎉)
- Vault balance sheet management
- Improved pool accounting paradigm (fully amortized P&L)
- Better tailored liquidity rewards
- New complex product categories
- New secondary market infrastructure paradigms
Overall, layer 2 allows us to explore more complexity and more options that aren’t possible due to gas constraints on L1.
Although this won’t be live with v2 launch, we are looking for L2 to be a fast follow feature.
Just One More Thing…
Right now there’s a proposal active to dismantle to Bonding Curve so be sure to vote.
We hope you’re as excited about Premia v2 launch on mainnet as we are and we can’t wait to see you all earning yield and trading options on v2.
Be first to know when Premia v2 launches on mainnet by joining our Discord server and keeping an eye on our Twitter with notifications on 🔔
