FloorWars Synthetics - USD vs CryptoPunks Decile Floor Covered Call Options
USDfw10PUNKc800-1221 is a covered call option on USD versus the Decile Floor CryptoPunks index price converted from ETH to USD. Token pairs are minted and collateralized by 1 USDC and represent 1 USDC worth of risk versus the price of USD in fw10PUNK at expiry. Long tokens expire worthless if more than $800,000 USDC is needed for 1 theoretical "fw10PUNK" otherwise are valued at the difference proportionate to the expiry price. For example, if fw10PUNKUSD (the inverse price) settles at $400,000 on December 31st, each long token will be worth: (1/200000 - 1/800000)/(1/200000) = 0.75 so $0.75 USDC per token. Short tokens are worth the remainder of the $1 of collateral, e.g. 1 - 0.75 = 0.25 so $0.25.
How it's made
Our hack is entirely based on UMA (a sponsor). We launched a long short pair synthetic token using a forked UMA/launch-lsp using our custom whitelisted collateral tokens. We used scaffold-eth to create a front end as well an example dapp which calculates index prices as outlined in our UMIP. Our UMIP was posted to the UMA Discourse/Discord for voting into the DVM. There are NFT floors, and there's a liquidity pool on random CryptoPunks, but there's nothing that offers purely synthetic exposure to CryptoPunks price in, not only ETH, but also USD. We accomplish this without needing any NFT custody and remaining fully decentralized. Not only can you take a long position on NFTs but also short. And you can long without purchasing a whole Punk. Our hack also has code in these other repositories in our GitHub org: UMIP to add new price identifiers for Decile Floor CryptoPunks in a forked UMIPs repo to become a PR: https://github.com/FloorWars/UMIPs/blob/master/UMIPs/umip_add_ETHfw10PUNK.md UMA's launch-lsp was also forked to handle our custom whitelisted collateral on Polygon: https://github.com/FloorWars/launch-lsp Our main repo is floorwarsv2 which contains a "PUNKOFFER" branch which is a separate dapp to demonstrate calculating Decile Floor index price from on-chain data. https://github.com/FloorWars/floorwarsv2/blob/punkoffer/README.md