Different Setups

1. Transferability

To improve user experience for takers, a market maker can play both sides of the contract in construction. The maker constructs and funds the entire contract which has an additional covenant clause allowing the maker to sell one side of the contract to another party. This setup makes a reasonable trade-off where the maker assumes all initial complexity and a temporary up front cost, while the taker has a greatly simplified experience. Overall it provides a bond-market like interface while remaining non-custodial. It also provides a more convenient and intuitive way to provide liquidity without exchange order books.

2. Renewals

For use as savings accounts or long-term speculation, some Hedges and Shorts may desire to stay in their positions for longer than the contract maturity date. Waiting for maturity to seek the next contract may be deemed a hassle, and present unwanted risks while in between contracts.

The simplest way to stay in a contract is to interact with a willing counterparty to renew terms of the contract via mutual redemption. Note that as long as two signatures are present, they can simply transfer the funds to a new contract address.

Alternatively, renewable contracts may be constructed where either Hedge or Short have the option to extend the maturity date of a contract, with otherwise identical parameters. Renewable contracts would typically have different pricing compared to new contracts.

3. Non-stabilization contracts

While AnyHedge is designed around the need to mitigate volatility, there is no fundamental reason why the contracts cannot be designed to cater to wider speculative needs. For example, instead of providing constant fiat-value output for the Hedge, the script can instead amplify outputs on the downside as well to cater to proper Longs. A wide range of derivative products are possible in this fashion, and will be developed according to market demand.

Third party audit of mathematical soundness.

We take the reliability of our protocols very seriously, so we had a third party do a mathematical analysis of the AnyHedge protocol.

Read the results