Charm, a relatively new decentralized options platform that is based on the world’s second-largest blockchain network Ethereum has successfully gone live today on the 18th of January, 2021. In an official announcement, the company said that it has launched its mainnet today. It will offer a modern way to users for trading options contracts of Ethereum (ETH).
As per the announcement, there is only one digital currency currently supported on the platform of this options platform which is Ether (ETH), the second-largest cryptocurrency in the world in terms of market capitalization. This protocol makes use of Automatic Market Maker (AMM), which proves beneficial in different cases. With the help of Automatic Market Maker, the decentralized options protocol can reduce the expenses of users and can develop liquidity as well, the company said in the announcement published on Monday.
The company claimed that with the launch of the Charm protocol, it has introduced users with a new model that can be used for the creation, trading, pricing, and settlement of options. Furthermore, the company outlined the key features of this decentralized protocol in the announcement post and said that these features distinguish it from other options platforms available out there. The most notable feature of this protocol that sets it apart from others is that users can determine the prices of options with the help of demand and supply. This means that there is no need for the Automatic Market Maker to depend on external decentralized oracles for determining the pricing of options, said the firm.
Apart from this, users would be able to get the intrinsic value of their options if they pick to sell them prior to the date of expiry. Moreover, users will have the choice to short their options, which will allow them to sell their options without purchasing them in the first place. Another one of the key features that the company said makes Charm different from others is its offering of low slippage.
However, users have been given a warning regarding the usage of this protocol as it is experimental and unaudited currently. Users have been advised to avoid depositing a large number of funds.