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On A Roll: How a Young Startup is Bringing Options Trading to the DeFi Space

FinNexus was born only a little more than a year ago. Yet they are already at the forefront of crypto innovation, having built one of the very few platforms exploring options trading in decentralized finance.

Their protocol, based on Ethereum and Wanchain, deploys an innovative system that relies on pooled liquidity to write and settle options, as well as to share premiums, allowing users to trade options seamlessly without the need for an order book. Thanks to the FinNexus Protocol for Options it is easier than ever to buy and exercise BTC, ETH, LINK, SNX, and MKR options in a secure and decentralized way.

The company has been on a roll recently, launching a series of new upgrades. And planning more.

In January, they deployed a new mining system allowing users to gain up to over 2000% APY rewards by mining USDC/USDT and FNX in pairs. Assuming the best combination of the two is chosen – dirty little secret: it’s 10:1 in FPT(the pool share) – and the tokens are mined and staked to the fullest, the reward multiplier can be a stunning 320x. The new mechanism, however, appears not to have simply been thought of as a boost to users’ profits, but as an organic improvement to tie USDC/USDT and FNX contributions together and avoid farm-and-dump scenarios.

The team has concurrently designed a new UX/UI for the trading page to support the mining mechanism. A complete redo of its Home and About Us page is in the pipelines, too.

FinNexus has then moved on to challenge one of the issues all up-and-coming Defi projects must face – liquidity. Though the value locked in their protocol is increasing fast, the team has completely moved its AMM liquidity mining to SushiSwap, where it has been part of the Onsen program since December. As for centralized exchanges, FNX has been added to MXC – on top of Bitmax, Bitrue, BKEK, and others – while more listings are likely in the near future.

The latest news to come from the team, however, is a huge FNX token burn, amounting to 292,601,955 tokens, about 60 percent of their total 500 million supply. The decision was taken after a community vote selected this option with a crushing majority over the possibility of establishing a community-controlled fund.

According to the FinNexus team, the burn was meant to allay fears on the part of investors who had long been concerned that such a large amount of non-circulating tokens could be dumped on the market in the future, jeopardizing their gains. The decision, FinNexus says, once again reinstates the project’s commitment to long-term goals.

These developments have been accompanied by an ongoing airdrop that will see the team providing the equivalent of 1068 FNX to 500 qualified addresses in their platform pool share token. Unsurprisingly, the targets have been chosen among those who are most likely to participate in Defi projects – the details are on their blog.

It is perhaps unsurprising that with such an array of news – and the ongoing alt-season – their token should see a strong upward trend. As this article is being written, FNX is well above 0.7USD, an increase of over 400% over the past month, while the total value locked in their protocol has moved from less than 1 million in December to over 9 million – a clear sign of investors’ confidence.

It is easy to guess that with more developments in the pipelines, value and returns are likely to grow in the foreseeable future. FinNexus is already in talks with Frax Finance to create a new pool with algorithmic stablecoins as collateral and tap into the growing liquidity associated with that market. They are also studying a new insurance system for contributors to their USDC/USDT pool, although details of this latter project have not yet been made public. Moreover, they are working on NFTs to combine different options strategies and provide tailored products for traders.

Finally, FinNexus is operating in a broadly positive context, being one of a handful of options platforms in DeFi, even though data show these derivatives are ever more popular among retailers in legacy finance. As reported by the Economist, last year “almost 30 million equity options were traded each day on American exchanges, a rise of more than 50% from 2019.” It might well be only a question of time before they turn to crypto and Decentralized Finance.

With these fundamentals, these developments and, increasingly, these results, anyone in crypto should keep an eye on FinNexus.


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