Onchain options project Diving Board has launched its alpha, enabling DeFi users to get a feel for its UX and core contracts. The options platform has been the product of intensive development and boasts verifiable data that utilizes Space and Time (SxT), the decentralized data warehouse that’s becoming a DeFi mainstay.
Crypto traders who favor derivatives but prefer to keep their trades active over a long timeframe are drawn to options. While not for everyone, those with the knowledge to utilize them and the patience to wait for contracts to reach maturity can be rewarded for correctly calling the market. Access to crypto options trading has traditionally been limited, however, due to a paucity of platforms that offer the products. Diving Board is thus a welcome addition to the fold.
Diving Board Goes Deep on Data
One of the challenges when creating crypto options contracts that are settled onchain is the amount of data that must be pulled in. Pricing and other market data from multiple sources must be queried to ensure that strike prices and expiration dates are accurate. Traders who believe an asset such as BTC will go up in value can take out a call option, while those who believe it will go down can take out a put. For a platform such as Diving Board to operate correctly, these contracts need to be accurately tracked and measured.
Enter Space and Time, whose ability to provision verifiable data onchain is ideally suited for such scenarios. Vinita Rathi, Founder of Diving Board and CEO of Systango, explains:
“Options are incredibly data-driven, and it’s paramount that the data powering our platform is accurate and tamper-proof. We’ve built Diving Board on Space and Time’s verifiable compute layer to power more informed and strategic trading for our users.”
Having recently been integrated into Chainlink nodes, Space and Time’s verifiable data solution has become more accessible to DeFi developers. Using zero knowledge proofs, SxT’s flagship Proof of SQL allows a database to generate a SNARK cryptographic proof of an SQL query execution. This guarantees that the query was computed accurately and on untampered data. There are two components to this process: the Prover generates a proof of query execution, while the Verifier validates the proof against a cryptographic hash of the data.
Low Volatility Makes Options Attractive
When it comes to derivatives, crypto traders favor volatility. It’s how their money is made – and lost. Through applying leverage, savvy traders can profit from movements in digital assets, and the more sudden the breakout, the better. Lately, however, the crypto market has been unusually calm. In Q3 of this year, crypto volatility hit a multi-year low, with Kaiko’s market reporting observing:
“Even the Grayscale ruling at the end of August – which requires the SEC to review Grayscale's application and is believed to increase the odds for a spot BTC ETF approval – did not cause any significant price movements. While crypto assets continue to exhibit more volatility than most traditional assets, the gap has been narrowing, with both BTC and ETH closing the quarter slightly less volatile than oil.”
Options trading is better suited to these sorts of conditions, allowing traders to leave positions open for longer without perps fees mounting up. Diving Board has therefore debuted at a propitious time when the comparatively calm market allows options to be put through their paces.