Guys, what is the price at which a futures swap

Thanks Zachary, what’s then the advantage of futureswaps if anyway the price applied will be the price at the moment of the settlement block, which not only we dont know, but also can go against one’s interest?

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31.01.2023

Zachary Chan

Benjamin OM
Thanks Zachary, what’s then the advantage of futur...

It was designed to help stabilise large derivations between DEX price vs oracle price. So if one dAsset is trading on a premium or discount exceeding 5% of oracle price, all users have a change to minimise their losses by trading futures, which is pegged to a formula.

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31.01.2023

DanieL BaptistA

Benjamin OM
Thanks Zachary, what’s then the advantage of futur...

Hi! The advantage is to bring the price of the dtoken to a range between +/- 5% of the price of the oracle at the settlement block. The advantage is to avoid big differences between the oracle and the DEX price, which otherwise could occur. It's not exactly a user protection per si, in the sense of being in the direct interest of a user. Is to protect the ecosystem from uncontroled swings and therefore and indirectly, all users by default, while maintining an ecosystem that will be a as faithfull copy of the real world stock market. If a user uses the settlement block contrary, that may happen yes, and not reduce their loss per se, but that is no different from the real stock market, you can long a stock and, by bad judgmemt of the macro environment, this one dumps, and you lose a certain amount. The same opposite is verified.

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31.01.2023

Spencer L

Benjamin OM
Thanks Zachary, what’s then the advantage of futur...

To add to all of the good stuff that’s already been said, the future swap is less about getting profit than keeping dStocks fair and maintaining that trading dStocks is like trading stocks. You can see above about a week apart the price of dStocks touches the bounces the 5% mark (where the future swap is). So trying to future swap at the moment of the swap will almost certainly result in losses, because you have to buy/sell the stock with a fee and then use the future swap, and the price near the time of the future swap will be very close to +/-5%, whereas in the middle of the week there is a peak, when we are far away from the future swap. That’s where the future swap profit can be the most, especially now you can see some dStocks come with 10% premium. So you can make a 5% profit, but the risk comes in that you don’t know which way the actual stock will move, you need to wait 3 days until the swap while things can change.

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31.01.2023

Zachary Chan · Accepted Answer

Zachary Chan

Futureswap is oracle price +/- 5% depending on the side of the swap.

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31.01.2023

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Guys, what is the price at which a futures swap

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