I am planning to launch a default option GDEX. More precisely, the default on the asset GDEX.BTC
The option will be pretty simple. If within a year the GDEX.BTC asset becomes a scam (like an OPEN.BTC asset), then the option will cost 1. If nothing similar happens to the GDEX.BTC asset within a year, the option will cost 0.
To understand the financial result, imagine the following situation:
You have 1 GDEX.BTC - the equivalent of 400 thousand BTS
Fearing that the GDEX.BTC asset may depreciate, you buy an option to default on this asset.
If GDEX itself does not believe in the default of its asset GDEX.BTC, it will sell you such an option at a price (the price invented by me) -0.02 BTS. In other words, for 2% of the face value.
By purchasing an option in the amount of 8000 BTS, You will fully insure yourself against the loss of 400 thousand BTS (the equivalent of 1 GDEX.BTC you have)
On the other hand, the seller of the option will make a profit of 8000 BTS if the GDEX.BTC asset does not default within a year.
However, if a default occurs, you will receive 400 thousand BTS, while losing 1 GDEX.BTC.
However, my thoughts are aimed at understanding what is considered a default.
For example, we can assume that the default occurred if the price of GDEX.BTC/BTS on DEX deviated by more than 20% from the real price of BTC/BTS at external market.
In this case, we acknowledge that the option is in the money and the default has occurred. However, this may be due to low liquidity on DEX. It turns out that there are no problems with the GDEX.BTC asset, but we admit their default.
Second example. We can consider as a default the case when GDEX stopped transferring BTC to you in the Bitcoin blockchain in response to your transfer of GDEX.BTC to the GDEX account in the Bitshares blockchain.
However, in this case, the option issuer will have to manually check the statements of each user that he did not receive the BTC on the Bitcoin blockchain. At the same time, correspond with GDEX, clarify the reason. It will also be necessary to get access to the MEMO in the Bitshares blockchain of each applicant in order to verify the specified BTS wallet.
To this can be added blatant abuse of users.
This option looks completely unattractive.
Third example. Consider that a default has occurred if the market commission for trading is higher than 5% in the GDEX.BTC/BTS pair
However, the owner of GDEX.BTC may not resort to this method, while the asset will actually default. Therefore, this method is not sufficiently informative.
We can also consider the case of the issuer's forced transfer of the GDEX.BTC asset back to himself as a default. In this case, the price on the market may not deviate significantly, and the assets of GDEX.BTC will be withdrawn from all or most of the users. However, there is a big question here. What if the ZhDEKS.BTS asset is forcibly withdrawn from only one user.
Should we consider this to be an asset default. After all, each user will buy an option to protect their personal financial interests. And the interests of the community as a whole, in this case, are not interesting to the user.
The same case also applies to non-receipt of BTC in the BTC blockchain by any specific user. After all, if you transferred GDEX.BTC to GDEX account and did not receive a real BTC, you should make a profit on the option. Because they bought an option to protect only their own risks. In this case, it turns out that if 10 thousand users received BTC in the Bitcoin blockchain in response to the transfer of GDEX.BTC to the GDEX account, but one user did not receive it, we will have to recognize a default on the asset in order to protect the rights of one user to the detriment of 10 thousand other buyers or sellers of the option.
