A new DeFi primitive is born: The launch of Tokenized Ranged Markets
The time has come, let there be range!
As the next step in Thales Protocol evolution and the ever-growing product expansion from Positional Markets, we are very excited to announce that today we are launching a Tokenized Ranged Markets product on Optimism Mainnet!
A DeFi product that’s unique, novel, and useful!
Ranged Markets is a product built on top of the Thales AMM, that offers users on-demand liquidity to markets around the question:
Will a specific Asset Price be INSIDE or OUTSIDE of the specified Price Range at the specified Maturity Date?
For the first time ever, Defi users can gain one-click exposure to INSIDE (IN) or OUTSIDE (OUT) positions of price ranges revolving around any Chainlink supported assets on Thales.
All of this is built fully on-chain, leveraging security and decentralization of the Ethereum network and the speed and low cost of Optimism Layer 2 Network.
The exclusivity of IN and OUT events (only one can win) and the unique architecture of the Thales AMM algorithm make it possible to offer a simple way to participate in market volatility without needing a counterpart (remember, the AMM is your counterpart!) that are not possible anywhere else in the Defi space.
And as with any product built on top of Thales that leverages the parimutuel markets architecture there is a chance of great payouts (relative to the collateral amount in sUSD) when picking low-odds Ranged Markets (for example if getting some IN tokens for 0.2 sUSD that market wins, the payout will be 5x or 400% ROI).
This launch opens up a whole new world of strategies possible in the Thales marketplace!
Are you ready to venture beyond what’s known to the average DeFi user?
But first, let’s take a minute to understand a few things.
How does it all work?
Ranged Markets use the same framework as the Positional Markets, but they use a Price Range instead of Positional Markets Strike Price, to resolve the market.
Introducing the IN and OUT ERC20 tokens!
Additionally, instead of having a single Strike Price with accompanying UP and DOWN tokens, Ranged Markets have two Strike Prices that construct a Price Range and are accompanied by IN and OUT ERC20 tokens that represent two exclusive (only one option can win) outcomes of the said Ranged Market.
Ranged Markets also use the Thales AMM contract to offer on-demand liquidity for IN and OUT tokens. Our novel AMM uses the already existing adapted Black Scholes algorithm to calculate the probability between 0% and 100% of a certain Ranged Markets finishing INSIDE or OUTSIDE a specified Price Range at the specified Maturity Date, and use that calculated probability to price the IN and OUT tokens.
Thales Ranged Markets use the available Positional Markets to form Price Ranges around their individual Strike Prices. That means that every two Positional Markets with the same Asset and Maturity Date will also create a Ranged Market around their respective individual Strike Prices.
We know this could be a lot to digest, but what better way to learn than by following up on an example?
Check out this potential payout example in our documentation.
The collateralization of Ranged Markets comes from underlying Positional Markets that create the Ranged Market. What this implies is that the volume driven by Ranged Markets will subsequently also drive volume of the underlying Positional Markets that the Ranged Markets are created around.
More volume for Positional Markets = More fees to Thales protocol ✅
Flywheel, anyone? 🎡
What comes next?
💡 Pro tip: On Friday 20th we’ll have Greek Office Hours in our Discord where everyone can join a chilled setting to talk about anything Thales related, including Ranged Markets. Click this link to save the date on Discord!
We are organizing a trading competition that’ll involve Ranged Markets and have some never-seen-before prizes like some sexy Ethlizards, among other blue-chip Optimism NFTs (who said Optipunks 👀).
The new gamified staking configuration will be rolled out on May 25th and all trades on Ranged Markets after that will be counted into bonuses for THALES stakers. You can read more about the new gamified staking system in TIP-48 (basically increasing protocol usage bonus while reducing the minimal threshold to receive it 👀, we know you’ll love it!)
Stay tuned, we have much more in the tank and we are here to prove it!