Chaohua Community | Exotic Markets: DeFi structured products, lowering the threshold for crypto investment
With the development of the derivatives market and long-term diversified investment needs, structured products have become active in the encryption market and have gradually grown into a new force.
On the evening of February 21st, Joffrey Dalet, founder of Exotic Markets, visited the Odaily Chaohua community to explain in detail how Exotic Markets lowered the threshold for crypto investment.
The Exotic Markets team used to be the top option market maker of FTX. As the market changed, they changed their strategy and decided to provide new investment strategies on DeFi instead of market making on CEX; the founder Joffrey Dalet, who used to be Hedge fund manager for a volatility hedge fund executing arbitrage strategies in large bank structured products.
The following is a transcript of the community conversation:
The following is a transcript of the community conversation:
Odaily: The goal of Exotic Markets is to "bring wealth management and structured products from banks to the world of decentralized finance." Since some readers know little about Exotic Markets, I would like to ask you to give us a brief introduction to the development of the project (e.g. founding time, purpose, etc.).
Joffrey Dalet：Exotic Markets is a DeFi (Decentralized Finance) platform on the Solana blockchain. Its goal is to become the most flexible structured product protocol, providing the widest range of benefits and underlying foundations in DeFi. For example, it aims to provide returns based on a basket of tokens, trading horizons, aggregators, and capital preservation. At the start of the project, no other DeFi protocol was able to provide these returns.
2022 is the beginning of an upswing for Exotic Markets. After closing a private equity investment of up to $5 million by the end of 2021, the Exotic team has been hard at work so that the DevNet platform (Alpha launch) can be launched on Friday, February 18, 2022!
Odaily: What are structured products? Why did you choose this track to start a business?
Joffrey Dalet：Structured products may also be referred to as exotic notes/products (or Exotic Markets), market-linked notes, and other terms.
They are prepackaged investment products that usually consist of one or more interest-linked assets plus one or more derivatives, where the assets can be anything. Exotic Markets will start by listing crypto assets such as major cryptocurrencies against other cryptocurrencies or against USD stablecoins. Since Exotic Markets will switch to DAO governance, the community will be able to add other assets such as oil, gold, etc. in the future. Assets can also be basketed using a predefined formula such as worst, best, ...
The principal of the bond is at risk (due to the derivatives component of the product), but it has the potential to earn more in return.
Issuers of structured notes pay investors"gain profit"Enhanced Yield) to acquire options and gain options (derivative exposure to the product).
Odaily: At present, most DeFi projects are developed around DEX and derivatives, and few projects choose to make structured products. In your opinion, what are the difficulties of encrypted structured products, and how big is their development space?
Joffrey Dalet：Currently structured products offer covered call and put options. Exotic Markets will be the first to offer new products such as digital, one-click and basket-based token payouts.
Unique features include:
RoboAdvisor uses multiple choice and wallet analysis;
Unique income structure;
Flexible protocol: integrate any structured product after DAO review;
Add new products after DAO voting.
Odaily: As far as I know, the Exotic Markets team has extensive experience in the industry. The founder, Joffrey Dalet, once served as a quantitative volatility hedge fund manager. Could you please give us a detailed introduction of the main members and their backgrounds?
Joffrey Dalet：The team used to be FTX's top options market maker. As the market changed, they changed their strategy and decided to provide new investment strategies on DeFi instead of making markets on CEX.
Founder Joffrey Dalet: He was a hedge fund manager at a volatility hedge fund responsible for arbitrage strategies on the structured product books of large banks.
Co-founder Benjamin Rameau: He was an early employee of Binance and the founder of Unicly.
CTO Loic de Checchi: He was at HSBC building the backend IT infrastructure for its structured products business.
Odaily: Compared with other competitors in the market (such as Ribbon Finance), what are the differentiating advantages of Exotic Markets?
Joffrey Dalet：competitor:
Ethereum: Ribbon;
Solana：Katana、Friktion
Exotic is different in that it uses a different approach to market making. It does not fully rely on external protocols for liquidity (e.g. Ribbon relies on Opyn), which gives it more flexibility to offer different types of returns that competitors will have a hard time replicating.
Odaily: According to the official website, Exotic Markets will launch options and mining products. Can you give us a detailed introduction to the specific product plan of Exotic Markets? What are the differences in the positioning of different products? In addition, can you introduce how these products lower the entry barrier for investors with examples?
Joffrey Dalet：Exotic Markets will have two types of markets: vaults and single products.
The vault will interact with the asset pool and run automated strategies to replicate certain returns. Currently, the most common form of managed vault in structured products is the covered call. Exotic Markets will innovate in this area, offering new foundational items such as SRM, RAY, MNGO as well as new strategies such as Call Spreads, Basket Plans, Call knock-ins and Active Management.
A single product will allow buyers and sellers of structured products to interact freely on an open and transparent platform. The range of possibilities for payouts will be enormous, and Exotic Markets intends to provide solutions never before seen in DeFi.
Exotic Markets will offer several structured notes with different features such as:
Cryptocurrency as a nominal deposit or as a premium investment: SOL, BTC, USDC, etc.;
Contract period: days, 1 month, etc.;
On an option basis, structured products will observe what defines the final payout: SOL/USDC, BTC/USDC, a basket of cryptocurrencies, etc.
Options: Plain Call, Plain Put, Double Digit, Single Digit, Call Spread, Put Spread, and more.
Odaily: Exotic Markets chose to build structured products based on Solana. Why Solana? Will you expand to other blockchains in the future? Which public chains will be your next target?
Joffrey Dalet：Exotic Markets has flexibility in mind from the start. This allows Exotic to offer a wider range of products than any structured product available today. However, this also comes at a price, namely higher requirements on computing resources.
The Solana blockchain can support thousands of transactions per second, and the gas fee for each transaction is only a small part. Solana also matches Exotic's spirit of decentralization. Additionally, Exotic Markets has received funding from the Solana Foundation.
Odaily: According to the official website, Exotic Markets will issue EXO tokens. Can you introduce its economic model and application scenarios?
Joffrey Dalet：EXO tokens will have governance functions and will also absorb part of the platform fees:
Staking EXO tokens will receive protocol incentives, such as part of the transaction fees on the platform;
Owning some EXO tokens can reduce protocol transaction fees;
Owning EXO tokens will provide access to new products and advanced features.
Odaily: Exotic Markets will adopt decentralized governance. Can you tell us about the DAO?
Joffrey Dalet：The team believes that Exotic should adopt DAO governance, allowing the community to decide the future of the platform. They plan to move to DAO governance in mid-2022 after the platform launch.
Odaily: In terms of financing, which institutional investments Exotic Markets has received so far, can you tell us about it?
Joffrey Dalet：Exotic Markets completed a $5 million private placement investment led by Multicoin and Ascensive Assets. Other investors include: Alameda Research, Animoca Brands, Morningstar Ventures, Solana Capital TPS, LedgerPrime, Bitcoin.com, FMFW.io, SkyVision Capital, Paradigm.co and MGNR.
Odaily: At the end of last year, Exotic Markets airdropped $50,000 tokens to Deribit, Matrixport, and Cobo users, and achieved good results. Why was such an event held? Will there be such a marketing plan in the future?
Joffrey Dalet：The idea of this campaign is first of all to be known on different platforms. And explain to users that it will be possible to deal with a new structured product platform that offers products that have not yet been explored in DeFi.
On a marketing level, we've been busy with local campaigns in different countries and globally.
For our latest campaign, we are distributing NFTs which can be exchanged for EXO tokens at mainnet launch. Come try out our DevNet platform for a chance to win some NFT vouchers.
Odaily: Next, what other development plans does Exotic Markets have? Can you tell us about your roadmap.
Joffrey Dalet：We launched our DevNet platform last week. We want as many people as possible to join us and try out our products.
We will be conducting an audit with Halborn, a well-known blockchain cybersecurity company, in March. With our mainnet launch planned for the end of March, we'll have even more products to offer, and we're really excited about that.
Our mid-term plans include launching the EXO token, moving Exotic to the DAO, adding a secondary market for Exotic, launching custom Exotic products, and more!
