NFTs DAO: European Options-linked NFTs

NFTs DAO: European Options-linked NFTs

By Rekt | DAO | 12 Nov 2021

When I on-board people to crypto currencies from even the traditional computer science World, I am taking aback with the difficulty involved getting up and running with the web 3.0 experience.

While it is something that we do on a daily basis as blockchain developers in logging into our Metamask and keeping our private key on ledger separate, the importance of this is lost in the great majority of people entering the space without the technical foundation or an many times the interest necessary to retain this deep dive.

This has also been increasingly true in the NFT space where creative types and those who saw Beeple on the Tonight Show want to get going as quickly as possible to highlight their art and earn a crypto of any variety and the reason the moment to spare. As someone who has diligently spend time to learn code my initial reaction is two want to force people into all of the web 3.0 tools that I use but I came to the realization that if this forcing turns them off to the experience or makes them feel off put then that's a net negative to the ecosystem.

I do fair amount of trading every day for European clients and am always looking for the best platform that offers the most liquid and sophisticated financial instruments for coverage on promising cryptocurrency projects. The learning curve on these trading platforms themselves is relatively high if you're trying to you do a quantitative trade or schedule a series of trades that are conditional.

The technical sophistication aside, many lack of the financial sophistication to be able to understand the instruments involved. Many people I know will just ape into 5000 Doge and hold them on Coinbase. This is fine for some, but there are more sophisticated strategies to take that will provide that same level of coverage and will allow you to mitigate your risk much more aggressively in the short and long-term.

I think they're reaches a point at which we have to recognize that we shouldn't hold our nose up at easy to use solutions for blockchain projects. For the longest time, it was gospel that you would have to log into a website with your web 3.0 wallet, but this is fraught with security challenges, especially with the epidemic of phishing advertisements on Google ads. If you search a great majority of the decentralized finance platforms on Google, the Google ad will be for a phishing site intent on stealing your crypto through your unwittingly approving a transaction that gives them carte blanche on a blanket approval to move all of your crypto. Very few people, much like the Apple terms and service agreement, will read a Metamask transaction prompt. Rather, most will just trust the site to be giving them a prompt that is safe and respects their privacy. This foundational trust has led to a great many exploits.

The work of a project I follow, NFTsDAO, to introduce European options settled simply through sending the requisite amount for a coverage level to their Ethereum Name Service address struck me as important because it simplifies the process of getting option coverage on a top crypto. For many, if you can't explain what's happening in one sentence than you will have lost them so for a project like this I would say: this platform offers "European" options--that can't be exercised prior to expiration-- that settles automatically at the expiration date and that the NFTsDAO will read the wallet address that sends them a particular amount of Ethereum and will automatically match coverage to that wallet address and settle at the end the month by sending them their USD-denominated profits.




On the exchange front there is tremendous competition but less so in the world of options so having this easy-to-use option allows more to on-board onto crypto without AML/KYC vulnerabilities is imperative. Over the years I've given my identity to great many sites that were well regarded and went on to be hacked and my information compromised. Let's also remember that many exchanges will require a Social Security number in order to do the requisite tax reporting and that information also was routinely stolen and sold on the darknet. People rightfully have an aversion for KYC because they don't protect the institutions to safeguard their information. Even when there are tremendous cyber security violations there's no meaningful punishment for companies that are sloppy with their security practices. If you're an executive at an exchange and you know that that consequence will be virtually zero besides some bad press and why would you divert resources into privacy safeguards when that consequential balance is skewed?

Financial instruments linked to NFT's is a use case that could have substantial legs in the years to come and NFTsDAO has positioned themselves favorably to be a market leader in that space, focused on mass adoption, ease of use, and doing a meaningful push to educate users on financial instruments. 

A great many NFT enthusiasts tell me that the ecosystem has grown stale. There must be the continual focus on blocking companies to innovate with use cases at all costs and NFT's can provide many of the same capabilities as traditional ERC 20s for governance and a host of other possibilities.

And NFTs are visual by design and afford the ability to communicate a particular function within the image itself. The scope of being able to have an instructive image on a cryptocurrency has not yet been fully defined but it has the potential to solve many of the problems we see with just a visually invisible ERC-20 for those who aren't tech literate. 

The most recent edition of the newsletter suggested that newsletter recipients will have the opportunity to be airdropped option coverage so I would suggest signing up their newsletter. They also provide customer service, which a great many blockchain companies will disregard entirely or the support will be simply a redirect to the websites FAQ section.

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