A sign of maturity in the crypto market is the addition of more sophisticated financial instruments being available to trade. In the case of Hegic, the option to trade options in a decentralised manner becomes available which is a great progression towards crypto’s eventual adoption.
Joining Hegic is incredibly simple with the only action needed simply linking a wallet. Like most other people, I just used my MetaMask wallet. Other options include Coinbase and WalletConnect, along with several options. Once this wallet is connected, you have the ability to easily transfer money into Hegic and begin trading.
What is Hegic?
Before I go any further into the article, an adequate explanation of Hegic is required. Put simply, it is a gas-free decentralised options exchange that is built on the Ethereum blockchain. It gives users the ability to buy both puts and calls that are ATM (click here for a more adequate explanation on options) for Ethereum and Bitcoin. The trading period ranges from 1-6 weeks which is a decent amount, but I would like to see it increased. Best of all, you can buy fractional contracts, meaning that the amount of capital you need to begin trading is far smaller.
Like so many (well, all) other DeFi protocols, Hegic relies on the liquidity provided by its users to function. This is done by staking, and in return for this, they receive a yield, which at the time of writing was about 18% if it is unhedged. Another important feature is the fact that Hegic has its own token, which is creatively called HEGIC. This token can be used for more complicated trading strategies, so for the sake of simplicity I will ignore it now. For most transactions, you simply need USDC coins.
User Experience
By far one of the strongest points with Hegic is the user experience. The interface is simply amazing, with there being calculators seamlessly integrated that gives traders a quick look into the potential results of their trades. You are quickly shown the cost of the contract broken down further to cost per hour, along with how long the contract lasts for. You know exactly what you are getting into before you actually press buy.
There are a few more worthy mentions in Hegic’s UI, revolving around giving you as much information as possible while making it fun. At the top right hand of the screen you see what the most popular option in the last 24 hours has been. I am not sure how useful this will be to your strategy, but it is, nevertheless, an interesting insight into how the market is. You can also view the leaderboard, which shows the most efficient traders, most profitable and most active. The most important information they provide is their analytics, which shows how much money has been traded on the platform, along with the money in the pools.
Hegic’s website is like so many others in DeFi. Not only is it sleek, but it is also practical and beautiful. Any potential competitor better have one hell of a platform if they don’t plan on competing on style.
Final Thoughts
The mere realisation that there is now a DeFi options trading platform is quite simply amazing to me, and the fact that it’s as incredible as Hegic is simply a nice alternative. They are looking at rolling out some new features over the coming months, so stay tuned into this project to be at the forefront of finance.
