Writing Options
How to provide liquidity
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How to provide liquidity
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Liquidity Providers (LPs) act as Options Writers and are at the core of Risq Protocol members. LPs provide liquidity to the different Option Pools in order allow options to be purchased. Since all options on Risq Protocol are 100% guaranteed by the primary crypto deposited in the pool contract, when the LPs increase in liquidity, more options can be written.
Note: There are serious significant risks in providing liquidity to Risq Protocol that may not outweigh the the amount paid to cover the risk (premiums) and/or the current RISQ incentive program. Please make sure to learn how to manage the LP system before you become an LP.
To join a $RISQ LP and start generating a portion of the and $RISQ rewards, there are 5 steps required: 1. You buy or already own the tokens you want to write options on in your wallet. (e.g. if you want to provide liquidity in the WBTC pool you must already have that amount of WBTC in your wallet.) 2. Select the LP you want to join.
Approve the contract through your wallet UI.
Confirm the deposit reflecting all of the tokens that you will be depositing through the UI of your wallet.
Wait for your transactions to be accepted. By this time, you can add writeTokens to your wallet (i.e writeWBTC or writeUNI).
Write tokens are locked up for 14 days after minted. These lock-ups should not be seen as a disadvantage for the user but for the purpose of stability in the liquidity pools.
The Risq Protocol LP incentive plan will soon issue RISQ as a reward holders of writeTokens.
Risq Protocol LPs 'pay' the profits to successful Option Buyer. This opens the LP pool to a possible losses of the initial capital contributed. Even though Losses are dispersed across the whole pool this issue should be weighed before becoming an LP.
There are several decentralized exchanges such as Pancake Swap and BakerySwap where you can swap tokens.
Open the Options Writers page and connect your wallet. This will allow it to interact with the Risq Protocol's LPs and make them accessible.
Select a liquidity pool you want to join.
Enter The token amount that you wish to add/contribute to the liquidity pool then click the DEPOSIT button. Your wallet ask you to: 1. Approve the smart contract 2. Confirm the transaction
Once the transaction has been accepted, you will have contributed to the liquidity of Risq Protocol’s bidirectional liquidity pools and start earning preimiums paid by option buyers.
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