🧑‍💼Why do we need an options protocol?

Lack of liquidity

NFTs can improve capital efficiency through staking, pledge, leverage, etc. However, there is currently a lack of means to enhance capital utilization. Although BAYC is trying to expand the use of NFTs through airdrops, whitelists, etc., the most income of NFTs still comes from capital gains through buying low and selling high. The application scenarios of NFT derivatives are limited, and investors may be afraid to enter or exit the market because of concerns about premature selling or mispricing of assets, which is not conducive to increasing trading volume and frequency.

Lack of objective pricing system

The two current price discovery mechanisms in the NFT market (external price feedback and built-in oracles) are insufficient in terms of timeliness, accuracy, and generality. Even if some exchanges or auction houses reach a standard price, providing it to the market or other exchanges is difficult. Some exchanges may even suffer short-term pricing failures due to illiquidity or manipulation by MicroStrategy, which affects the price of NFT derivatives. Therefore, price discovery mechanisms such as oracles are fundamental NFT liquidity infrastructures, which can promote the formation of the standard price and make the operation of derivatives more rational.