Incubate IVX

The purpose of this DAO proposal is to make IVX Finance our next incubated project.

What is IVX?

IVX is an on-chain options AMM built on top of GMX. By launching on Arbitrum, the protocol will solve a variety of issues that harm users of existing crypto-asset options platforms such as:

Mispricing: Liquidity providers are made to act as counterparties without adequate fee compensation. For instance, an options AMM may sell options for a quoted IV of 110% due to a lack of efficient calibration to broader market IV. This can lead to compounding losses for LPs over a period of time.

Costs: Expensive transactions on existing protocols lead to investors having an additional hurdle in fees and speed in executing their transactions.

Delta Reliance: Since most AMMs collateralize options with the underlying asset, they take on greater risk exposure to the underlying. The reliance on this delta for AMM returns poses a risk when the market moves against an AMM’s net positioning.

How does IVX work?

Solving these issues requires an options protocol built atop a scalable blockchain that doesn’t have settlement issues during trade execution. Building on Abitrum enables IVX the high computation throughput it needs while keeping costs low. Arbitrum Nitro facilitates low-fee trading on-chain with fast block times, allowing for greater latency and a more responsive venue for options trading.

Delta-Hedging with GMX

The IVX AMM periodically accrues exposures to the underlying tokens for which the options are derivatives. These exposures, if left unhedged, could result in the AMM losing or gaining funds as the tokens appreciate or depreciate. Since GMX’s oracle-based pricing model provides zero-slippage trading, the IVX AMM can take margined futures positions that hedge away net delta exposures without paying to take this liquidity from an order book on a centralized exchange.

How will this look for New Order?

Once this proposal and the subsequent snapshot is approved by the DAO, New Order will provide technical, fundraising, strategy, and marketing support to the IVX team until its launch date. In exchange for these services, the New Order DAO treasury will receive a 5% allocation of the total supply of IVX tokens.

Vote “For” if you are FOR incubating IVX Finance

Vote “Against” if you are against incubating IVX Finance.

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