Fellow Shielders, we are thrilled to introduce Shield, our new decentralized derivatives protocol which also includes a fresh and new homepage, upgraded features, and interesting behind the scenes to help you gain useful insights into the world of DeFi. Through Shield, we are building a one-of-a-kind decentralized protocol for the futures derivatives infrastructure, enabling global borderless access to finance. All in all, Shield strives to extrapolate on the success of DeFi in the derivatives market and expand accordingly. It’s a new era for on-chain derivatives traders!
Why We Built Shield
In traditional finance, derivatives trading is a huge market with trillion dollars as the daily trading volume. Just the way Bitcoin has impacted the global currency market, the decentralized derivatives protocol has the potential to capture the value of the NEXT BIG THING worth a $100 billion market cap. In the long run, DeFi will impact and disrupt CeFi & TradFi, all in all, becoming an unstoppable trend.
Shield’s core contributors have extensive expertise in the derivatives market. Since we have seen Uniswap and Compound transform cryptocurrency trading and lending, we feel it’s finally time to do the same for the derivatives market.
Shield-Derivatives DEX Disruptor
For us, this upgrade is about what makes us a unique fit for the market and telling that story in the best way. We are building a secure, stable, and open decentralized derivatives trading protocol. Based on a fully non-cooperative game network. Shield’s decentralized network is maintained by four roles; brokers, private pool LP, public pool LP, and liquidators. These also include scheduling of value, which is performed through the SLD governance token. Each role has clear interest incentives and sufficient competition mechanisms, and each person for their interests to implement the network needs. However, they also need to achieve the optimal network-wide Nash equilibrium to maintain the security and stability of the network. The key theory and innovative solution include:
-Precise pricing for perpetual options on-chain.
-Dual liquidity pools.
-On-chain random matching engine.
-Liquidator and decentralized Brokerage system designed based on game theory.
The SLD token is designed to facilitate and incentivize Shield DAO and value allocation. Shield captures value through trading fees and returns 100% of the revenues to the maintainers of the decentralized network (value creators) through innovative buyback mechanisms.
What We’ve Improved on
1. With UI & UX upgraded to a chic style, we now have a user-friendly interface plus the function of automatically reading wallet balance in both public pool and private pools
2. We have optimized the overall trading experience through improved system performance, optimized transaction speed, and reduced transaction pending time
3. We have improved traders’ capital efficiency and also added a transaction amount limit and guide so that traders can avoid gas fees wasted due to transaction failures.
4. The liquidator rules now display more transparent rules to attract capable liquidators to engage with Shield protocol
5. Fixed some known bugs
Introducing Shield’s 1st product: Perpetual Options
We are glad to introduce the first perpetual option, an innovative derivatives instrument that pioneers the first long-term on-chain option without the effort, risk, or expense of rolling positions. The perpetual option is derived from the traditional finance industry and we’ve been building a fully decentralized product since the Q4 of 2020. Interestingly, the paper drafted by Paradigm and Sam brought much attention to this new financial primitive. Shield perpetual options have these incredible features:
For option trader
※Exercise anytime with no expiration date
※Long-term exposure without the need to roll position, decrease operational work, and risk
※Concentrated liquidity to avoid liquidity fragmentation by different expiration dates and prices
For perpetual traders
※Maximum trading loss is the daily funding fee.
※On-chain leverage from 25x to 500x
Perpetual options’ unique features as financial instruments tap into a new and untapped market. We believe the only way to break the ice is to apply the features of blockchain technology to meet the needs that traditional finance simply cannot. As Jasmine, partner at A&T Capital once commented, “Shield Protocol’s perpetual option provides users a brand-new trading experience leveraging on the innovative perpetual contract that has no position loss. This new model avoids direct competition with CEX in the first place and can be counted as a unique go-to-market strategy. They believe the capable founding team will endeavor to provide innovation into the new era through joint efforts.”
Shield aims to bring changes in DeFi, through which Ethereum will comprise the derivatives market. It will be able to support unlimited crypto assets available to millions of traders. Through Shield, we plan to decrease the gap between the trading experiences of DeFi and CeFi platforms. Thus, many cryptocurrency traders and traditional traders can become a part of the DeFi ecosystem.
As always, we thank you for your unwavering support and contributions to the Shield ecosystem! By the way, Shield Nuclear Airdrop series is live now. Go connect your wallet and claim our gift-$SLD.