HEDGET AMA with Malcolm Lerider and Serge Lubkin and Bullishkid in the Kids Cave

BK:
Guys please welcome Serge Lubkin and Malcolm Lerider from Hedget. Thank you for taking your time and giving us the opportunity for the AMA today! For the start could you two please introduce yourself, your background and what your tasks are related to Hedget.

Malcolm:
Hello everyone, thank you @Steff_Bullishkid for inviting us!
I’m Malcolm, co-founder of Hedget. I ran the R&D at NEO back in 2017 and worked on global blockchain projects at PwC. I have been doing business development and community building at Chromia after I left PwC, as I see Chromia being the most flexible and usable blockchain from R&D and business perspectives. We now have a very exciting project to prove what Chromia actually can do, and it’s called Hedget!

Serge:
My name is Serge Lubkin. I was Chromia marketing lead during IEO and further exchanges listing. I built relations with communities and influencers. I’m MSc in Economics, but all my life, I’ve been doing marketing for various projects. Also, I’m an experienced derivatives trader, traded a lot on BitMEX/Binance/Deribit, mostly perpetual swaps and futures, and also options. Now, I am a co-founding Hedget with Malcolm.

BK:
As the DeFi space is still pretty new and unknown, may I ask how you had such a foresight to actually plan, develop and realize the project before anyone even expected DeFi to be THIS big. Or in other words, what fascinates you in DeFi and where would you like to see it move as we are probably not at the end of the current development yet?

Malcolm:
DeFi is a new and interesting universe. The problem we see is highly leveraged trading and extreme volatility, so market crashes are inevitable as well as small but powerful flash crashes along the way. We are building a peer-to-peer option protocol to mitigate risks for DeFi users.

All these food tokens are a good example of where Hedget wants to add value. While some of them have good intentions, there are many more that are looking to scam users. It can be difficult to know which ones that are serious and which ones that are scams. If people are willing to write options on for example the food tokens, then that could not only mitigate risk for traders, but could also be used as a filter on identifying which tokens that are long term viable.

A more established use case is to hedge positions in liquid and established tokens such as Ethereum and Bitcoin. This is actually in high demand among institutional investors and hedge funds. They need more alternative platforms to diversify their risk, and this is obviously one of our core target markets.

We think that crypto options market is about to do a similar boom as crypto leveraged trading did a few years back, and the early platforms there are still among the biggest today. We want Hedget to be market leaders if we are correct about this coming boom.

BK:
Thank you for the detailed answer! Yeah especially with the food tokens etc. even in the last days we had a huge usecase coming — it seems that the team actually predicted the market way ahead. Very impressive!
As the last weeks Hedget gained a lot of traction and hype all over the space, what would be out of your view the biggest achievements, partnerships and maybe even changes the Hedget team achieved?

Malcolm:
Hedget is currently in the KYC process and the token auction is planned to start next week. Anyone who would like to join should go through the KYC process at www.hedget.com

This is a novel way of releasing a token and we think it is a more fair and transparent way. An overview can be found on Medium, and more details are to be released soon.
https://medium.com/hedget/your-guide-to-the-hedget-token-auction-a1169e97032e

We are also wrapping up the prototype, which will be a first look into Hedget protocol. The options platform itself is expected to launch on Ethereum Testnet in about two months.

So far, Hedget have announced strategic partnership with Alameda. IEO is actually being done on FTX today as IOUs. There are other partnerships in the work but will wait to announce them until terms are agreed and signed.

BK:
Yes I already signed up :) And I think a big chunk of the people here did too.
As I know my community and they usually want to ask their own questions instead of mine I think we had a good introduction of the 2 big brains behind Hedget.

Community Round:
C:
Can you tell in a few lines what Hedget is / how it works for someone who isn’t much familiar to it?

Serge:
Hedget is a “Gadget for Hedging,” a platform for P2P decentralized options. You pay the smallest possible premium to secure your positions against unexpected price movements, seeing what we did the last few days, it’s pretty nice to have products like that.
In an industry where many take advantage of “gambling behavior”, we want to offer the exact opposite — a possibility to remove risk in a decentralized manner. So our values are aligned around eliminating risk in crypto. It’s like basic insurance for very volatile crypto markets.

C:
Thank you for your detailed answer! Very interesting regarding the potential synergies between eg Uniswap / food tokens and Hedget. It seems to me that this is a competitive advantage compared to leveraged trading platforms such as Bitmex or Binance, or even decentralized ones such as Perpetual. These platforms would need to first get enough volume and liquidity to be able to implement leveraged trading. Is it true options do not have such requirements and Hedget would be able to go-to-market with regard to new tokens much faster?

Malcolm:
Volume and liquidity is needed for options as well. We have detailed plan on how to achieve this. Part of this plans include liquidity mining, so that market makers get rewarded instead of paying fees. We are also starting with European style options only, where expiry date will be once a week, meaning that we can aggregate options for better liquidity. Furthermore, we are building an automated market maker to mine the HGET tokens while providing liquidity to options. Our partnerships focus on early liquidity as it is a self-enforcing loop; liquidity brings liquidity. It’s a positive outlook in my opinion.

C:
Will you support custom type options e.g. assets outside the usual ones? In other words are we able to create options for say, DOT, silver, and even stocks? And if so, how are you capturing accurate price info on these?

Serge:
First we will erc20 assets which include WETH and WBTC, then we will be adding other chains.

C:
What would you consider to be hedgets edge Vs current competition and what would you say sets you apart from the rest?

Malcolm:
Current decentralized options are on Ethereum. Trading these at the moment is both expensive and slow during this peak usage of Ethereum. Hedget use Ethereum only for adding collateral and settlement, transactions that are not time sensitive. The actual trading is on Chromia as a layer 2 solution, so trading options would be completely unaffected when Ethereum is under high load.

Added benefit is that it is super easy to build API’s on Chromia, which gives Hedget a big advantage in terms of integrating with other DeFi protocols and even centralized platforms.

C:
Thank you very much for taking the time for this AMA!
Can the ownership of an option be transfered to someone else? e.g. Alice creates an option, Bob buys it and then passes it on to a third person.

Serge:
Yes, the transfer of ownership (trading) will be done on Chromia thus tx fees will be fixed and minimal for takers and even negative for writers and makers.

C:
are there scaling solutions for erc20 assets in plans to implement?

Serge:
Chromia is L2 in this case with unlimited scalability and no tx fees for Chromia blockchain.

C:
Can you tell us about your plans with the raised funds. I’m interested especially about the team sturcture. I saw many projects raising funds and instead of building a real team, they would just hire “cheap” developers from 3rd world countries. Do you plan do have a shared physical location for the most of your staff?

Malcolm:
We actually don’t raise much. The private sale of ~780k is what we need to launch the product, whatever the auction brings will be used for extended features, for example more complex API’s and support of more chains. Auction is actually split into two separate; one for CHR and one for USDT. USDT will cover operating expenses, while CHR will be foundation treasury.

C:
How will hedget move to a governance model when most of the supply is owned by 3 big VCs (NGCs, FBG, CHR)?

Serge:
It’s quite distributed already, ngc, fbg and chromia hold together about 35% of private sale, other- it’s small holders with small caps. And more tokens are going out with IEO and Auction.

Malcolm:
To put in perspective, 35% of private sale is about 3% of total supply.

C:
What’s the advantage of the Chromia chain over Ethv2 (fees, speed) and Polkadot/Kusama for Hedget? Why not go for Polkadot right away?

Malcolm:
Chromia is a relational database wrapped in blockchain. Basically SQL operations on blockchain. It makes it super easy and super fast to develop complex features. This is a strategic advantage as Hedget will be able to iterate on option trading to build even more complex DeFi products, all very fast. Plus as mentioned earlier, it makes it super easy to build API’s to integrate with other protocols, which I believe is a necessity to succeed.

Serge:
Polkadot is a great project, but it is too complex to develop anything on top of it. Chromia is an SQL wrapped in the blockchain meaning you can develop anything and really fast, and all devs know how to handle SQL.

C:
Are there any plans to also provide your option product to chains such as Polkadot, Atom or Sol in the future? Basically a Cross-chain option solution?

Malcolm:
Yes, institutional investors and hedge funds are pushing us to implement native BTC asap, so we are of course looking at that. Other chains are also likely to follow, it depends on what traders and the community would like to see integrated. HGET tokens staked for governance will be able to vote for next integrations.
To clarify, this would be added support for collateral and settlement. All trading of options is of course on the same Hedget platform on Chromia.

C:
Chromia isn’t in mainnet stage and still using an ERC20 token how will be it different from using it over the USDT ERC20 on auction? The gas price spikes and congestion raising will affect auction and retails burning gas.

Malcolm:
You are correct, Our auction timeline did not take food token spike into account. We may adjust the auction timeline as we know that some transactions take 3h to go through.

For the Hedget platform itself, Ethereum is only used for adding collateral and settlement, these transactions are not time sensitive and not too affected when Ethereum is under high load, but yes, it is unfortunate timing with auction, and timeline may need to be adjusted.

C:
Based on this and many auctions people got burned participating (mesa.eth and others) are you considering other form of some whitelist or whatever for retails. I had pretty bad experience participating in the current auctions.

Malcolm:
Hedget have strict KYC with whitelist. Currently 2600 approved on whitelist.

Serge:
Our auction is complete different.
It’s slow and using bots giving no advantage against users at all.

C:
How are the liquidations avoided? Is it like the FTX leveraged token model where they keep selling a little before the liquidation price? Or are you simply using the premium as an insurance.

Serge:
Your funds on Hedget (and anywhere else) cannot be liquidated if you don’t use margin. Options are naturally used without any margin on the buyer side.

If you use margin in your trading make sure you have a hedging strategy. If you have one — mind options it’s the best solution to click a “pause” button on volatile market.

C:
For the settlement of options, I’m assuming an oracle will be required? Are you looking at Chainlink for a potential partnership or considering other alternatives as well?

Serge:
For physically settled options you don’t need any oracles, the buyer is an oracle herself.
But yes we need feeds for cash settlements and for other conversions.
But chainlink is suboptimal solution, their feeds are too slow, so we definitely will not use them.

C:
In which stage of the roadmap will the token has its full utility described in the whitepaper? Directly on milestone “Hedget launch”?

Serge:
The HGET token is the native utility and governance token of the Hedget platform. It will be issued on the Ethereum network as an ERC-20 contract and will have representation on a Chromia sidechain.
Effective immediately upon launch, HGET will serve as the governance token of the HGET platform. In the preliminary stages, the token holders can vote on adding new assets, default options parameters and UI improvements.
Before the platform is launched with real assets there will be a Testnet platform (hosted on both Chromia and Ethereum testnets) to participate on which users need to stake HGET to access. Users will trade funds that have little to no real value, but the best performing traders will be rewarded automatically by Hedget protocol with HGET tokens upon mainnet release.
When the platform migrates to Mainnet, HGET will be used to prevent spamming of orders which can lead to API overloads and order book manipulation. HGET tokens will need to be staked to interact with the platform. Staking requirements will increase as the monetary value and frequency of a user’s interactions increase.
As the platform is further developed, a DAO will be established and HGET tokens will be used to determine transaction fees, reserve requirements, and general functions and features of the platform.
Lastly, the HGET token will be used as a security measure and reputation engine in the future when margined options are implemented. Options writers who wish to offer options without providing 1:1 collateral will need to stake HGET tokens which will be used to purchase fully collateralized options as a hedge in case of Capital insufficiency risk. This mechanism ensures end users cannot be adversely affected by the insolvency of an options writer.

C:
Why do you think there is a need for a decentralized derivatives exchange?

Malcolm:
Specifically decentralized options; going through possibilities of building decentralized lending protocol, one of the key pieces was decentralized option for risk management, and there simply wasn’t any satisfying solution out there. We have then confirmed with institutional investors and hedge funds, and they are more or less screaming for more alternatives on crypto options. I would say it is a verified demand for what Hedget is building.

Serge:
Hedget is not an exchange but the protocol — a platform to connect to other DeFi products as well as centralized ones.
DeFi and crypto markets in general are highly leveraged so hedging with options is optimal solution to not get burned with unexpected price swings.

C:
What if the auction’s price reaches crazy high, like say, 100–200$. How will those extra funds be used?

Serge:
We will put 100$ as a max bid price per token, but our auction is designed that way that it won’t be possible to overprice.
Participants will have enough time to make decisions.

C:
Does hedget have listing agreements with more exchanges than FTX so far?

Serge:
Yes, we announce them soon.

C:
Yeah also did you make some precautious for the max bids? Like there is a crazy demand and not much supply. You know some crypto users are degens and sometimes they do crazy things paying high price could potentially rekt them.

Serge:
Main phase has bidding rules.
First day you can increase your bid 90%, next 50% and so on, so no crazy jumps are possible.

C:
After an option is expired the “physical asset or cash gain is settled” as to be chosen by the party. Is there smth like a timewindow in which you have to decide this? Or a maximum time in which you can decide how to deal with it?

Serge:
Yep, expiry date (deadline to settle) will be a week after maturity date.

C:
Isn’t 1 to 100 a too big range? There may be shortage/excess of funds with such big range. How will the team manage that. Also, has the code been audited?

Serge:
It’s for a price discovery mostly.
all excessive raise (more than 6m) will be used for liquidity provision for hget token and on Hedget platform to write options.
Yes, of course, it is audited by 3 teams already.

C:
You mentioned you have a partnership with FTX/Alameda. They have a great reputation in the community and I’m excited for your partnership. Could you talk about how it is working WITH them and how they are assisting you besides listing?

Serge:
Mostly networking and introducing to different communities around the globe.

BK:
Okay guys we already extended for 10 minutes longer then we were supposed to.
Please let the team finish the questions.If anyone would have unasked questions feel free to send them to me and I’ll gather info.
Thank you very much for the time Serge and Malcolm. It was a pleasure to have both of you here and I’m sure we will hear a lot more from $HGET and the team in the coming weeks/months and hopefully years when it is the big and early player.

Serge:
Thanks a lot for this session, great questions, and amazing community!
Thank you all for your interest and participation.

Malcolm:
Appreciate all the support and thank you for joining this AMA with us.

Some useful links:
Website: https://www.hedget.com (https://www.hedget.com/)
Hedget Whitepaper: https://hedget.com/whitepaper.html (https://hedget.com/whitepaper.html)
Twitter: https://twitter.com/Team_Hedget (https://twitter.com/Team_Hedget/)/
Telegram: https://t.me/hedgetchat (https://t.me/hedgetchat)
https://medium.com/hedget/welcome-to-hedget-d18ad119bb8 (https://medium.com/@hedget/welcome-to-hedget-d18ad119bb8)
https://blog.chromia.com/chromia-incubates-defi-project-hedget-decentralized-protocol-for-options-trading (https://blog.chromia.com/chromia-incubates-defi-project-hedget-decentralized-protocol-for-options-trading/)/

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http://t.me/bullishkid Fulltime Trader, Shitposter and shitcoin library since 2014 "Shitcoinmaster" - titled by Killmex

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Bullish Kid

Bullish Kid

http://t.me/bullishkid Fulltime Trader, Shitposter and shitcoin library since 2014 "Shitcoinmaster" - titled by Killmex

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