AntiMatter Finance basically contains FOUR main products, Dual Investment, Bull & Bear Tokens, Financial NFTs, as well as Antimatter DAO.

So far, the most promising part lays down to Dual Investment and its derivative - Recurring Vault, I’m not going to explain every detail about these product but rather the thoughts and findings which play an essential role to understand as well as to evaluate the whole project.

It’s defined as the first structured product of AntiMatter, where we can find that buying a Dual Investment is actually selling an option to the platform.

However, we still do not know what the ‘platform’ particularly refers to since it could sell the product to the market maker off chain or to the AntiMatter itself who stands for the product buyer’s on-chain counterpart.

By reasoning we could say to some extent it may be a pool or a vault which is maintained by the project itself, and the pool acts as the counterpart of every product buyer. There’re some clues to support this judgement, e.g. it’s declared in the risk control part that ‘Real-time adjustment of APY is executed following market price fluctuations to control the platform's cost’, Here the ‘platform’ refers to the Antimatter itself.

So here we could see a mass difference between the traditional cover-strategy-based product and the dual investment product. In deed, this product cannot even be called an option-based structured product but rather a product which simulate the options’ reward without introducing the right as well as the duty an option holds.

There’s no right or duty in the structure products, but only the MUST which has already written in the logic of contracts, i.e. if the Settlement Price is higher than the Strike Price, then the product will be “exercised” automatically without the judgement a buyer would make.

Given the calculating table above, it’s quite clear APY plays the role of the option premium, which pushes the problem straight back to how to reasonably determine the price of the option. There’s no detail about this topic, yet we can see some clues in its statement.

APY = Return Ratio / (Delivery Date - Purchase Date) * 365100%*

APY is constantly changing and is obtained in real time, depending on the strike price, the remaining time to delivery date and the volatility of the market price. For example, the lower the strike price, the more volatile the market price, as well as the higher the APY. When a user successfully subscribes to a Dual Investment, it means that the APY at the time of placing the order is settled and it will not change until the delivery date.

Unlike the ribbon protocol, the strike price is pre-defined by the protocol itself, users can decide to invest various products according to the strike price. However, this may lead to liquidity fragmentation if there were products with various strike prices and each requires a pool.

Strike price would floating with maximum 5% of the current underlying asset market price. e.g. for an Upward Exercise product, its Strike Price = Current Price * 105%, rounded to thousands. If the current price equals to $51,000, then the strike price would be $52,000, $53,000, and $54,000.

As we’ve discussed above, by reasoning we could largely see the Antimatter smart contract as a platform-owned liquidity pool, where all the deposits regardless the strike price are aggregated together into the pool(it can be segmented pools and the conclusion remains the same).

The pool would have 3 payoff situations: reserve USDT & loss BTC, reserve BTC & loss USDT, loss USDT & loss BTC, without the situation of reserve USDT & reserve BTC since two options could not be exercised at once. As we could see, there’re only three sources that may generate APY rewards: the reserved token, the deposited token and the pool itself.

The deposited token makes the protocol behaves like a bank, for once the deposit has already been put on chain, there’s no way for the users to withdraw until the expiry date, which enables the pool to distribute the deposit tokens among products with various strike prices and expiry date.

Upon now, it’s clear that this protocol has some drawbacks as follows.

• the reserved token requires a precise pricing of option products (APY), which dampens the solvency if it’s too high whereas shrinks the liquidity if it’s too low.

• Using the deposited token to rewards needs a precise management of liquidity, which might be worse when introducing the weekly circled Recurring Vault.

• So far, there’s no function for users to add liquidity into the pool, which is inconceivable for a protocol relay heavily on liquidity.

It’s declared that We do not have plan for liquidity mining in the short-term because many DeFi projects have proven that this incentive mechanism is a wrong approach. As we grow our products this year, we will propose to introduce more mechanisms to boost liquidity in both DEX and CEX

• It’s deployed on the Binance Smart Chain, hence all the tokens that are not native to are the wrapped token, i.e. the BTC is indeed the BTCB on BSC.

• Unlike the Bull&Bear tokens, it introduces chainlink as the oracle to feed the market price, which is clearly a reasonable adaption.

• There’s only front-end code of the dual investment product in its github, the security of the smart contract code still remains in doubt with the absence of the smart contract code as well as its audit report.

This product is basically aims to compete with structured protocols like Ribbon Finance. To make it clear, it’s a big vault based on the dual investment products above, which enables users to automatically invest into dual investment products without having the need to manually subscribe.

There’s some difference between the under development Recurring Vault and the Ribbon Finance.

• Ribbon Finance is based on the OPYH oTokens as well as the Gnosis Auction platform. Generally speaking, it acts as a decentralized deposit manager to mint oTokens (tokenized European call&put option), sell them in the auction platform and distribute the payoff.

  while the Recurring Vault is based on the Dual Investment, which do not involve the process of minting and selling tokenized options, but instead it covers a pool maintained by the smart contract, which simulates the payoff of cover strategy and automatically exercise the strategy without the judgement of the buyer.

• Ribbon Finance cannot switch its strategy automatically unless one withdraw deposits from one product to another at the end of each round.

  While Recurring Vault automatically change the depositor strategy into another one. i.e. in the case that the option is exercised, the settlement currency is different from the deposited currency and therefore in the next cycle the strategy is changed to Covered Call or Put Selling respectively.

• Ribbon uses deposits as collateral to generate oTokens, hence it support a vast type of deposit tokens including the yvUSDC, which would in return bring more gains to the depositor generated by the Yearn yVault.

  Because the Dual Investment product functions as a liquidity pool hence it cannot support a more generalized token which would potentially bring more gains to the depositor.

What the bull & bear tokens (BB token) aiming to do is to simply create the Perpetual American Option, which is an option that can be exercised at any time and has no expiration date. Selling the perpetual option (both American and European) would require the counterpart to take on a huge amount of risk and uncertainty up-front, which makes them rather hard to be priced. Hence, there’s rather small amount of projects aiming to establish a decentralized perpetual option products, which includes the Everlasting Option proposed last year by SBF which i’d explain latter(not yet), OYPN and the Bull & Bear tokens.

Here we can see the major barrier of creating a perpetual option lays down to how to price it and trade it, what the form of perpetual option is in decentralized world.

In a word, the BB token is a token pair consists of a call (bull) token and a put (bear) token and is minted by the collateral in the liquidity pool. What the token pair can do is not just traded by users as a normal ERC20 token, but also functioning as a call and a put perpetual American option that can buy and sell a token at the strike price respectively.

So here comes to the point, what’s the form of BB token, is it a ERC20 token represented an option contract, where each of them have a strike price and expiry just as Opyn oTokens? The answer is negative, BB token is just a normal ERC20 token without the representation of any option contracts, and by implementing the logic into the smart contract to simulate the execute process of an option, which is similar to the idea of dual investment above.

To simplify it, i’ll start by the example shown below.

Option product e.g. WETH Option is NOT an option, instead it is a pool covers of underlying assets i.e. WETH and USDC, and BB token. And each option product contains two parameters: option price floor and option price ceiling.

Let’s take WETH option product as an example:

The call (bull) token for this option product always has the right to purchase WETH at 1500 USDC, and the put (bear) token for this option always has the right to sell WETH at 6000 USDC. If the market price for WETH is currently at 4000, then the bull token holders can purchase WETH at 1500 and sell for 4000, making 2500 USDC profit. Conversely, the bear token holders can sell WETH at 6000 purchase back WETH at 4000, making 2000 USDC profit. To be aware, these process is done not by newly created token’s function but the deposit and withdraw process.

If one deposits {1 Bull + 1500USD} then he could withdraw 1 WETH, which simulate the payoff when exercise the call option. If one deposits {1 Bear + 1WETH} then he could withdraw the same amount of USDC at the strike price, which simulates the payoff when exercise the put option. Since there’s no expiry date or exercise time, it functions well as the perpetual American option.

And one can create bull and bear token pairs by depositing a particular amount of underlying assets like USDC and WETH into the pool. However, this create and liquidity function has not been deployed yet.

In addition, one can simply buy and sell any individual Bull and Bear token. Although it’s not clear that how’s the swap process done, we can see some clues in its testnet tx logs.

The address circled with the blue line is the UniSwap V2 USDC/WETH address, which indicates this process involves a dex swap process. However, it shows buying a bull token does not involve the swap process in some dex pool, but involve the mint and transfer process.

More interesting, it shows the process to sell the bull token is basically the way to transfer it into minting address. So here comes the point, is this process in the mainnet acting the same as the testnet one? To figure out, i used the bsc mainnet to test, which indicating that buy a bull token is NOT from the holder but instead from the miner, it’s totally a minting process! Moreover, the green circle indicates the token has been deposited into the pool (bull token smart contract), which in return verifies the assumption proposed above!

This verifies the correctness of the assumptions above, since BUll token is just a simple ERC-20 token. After understanding the mechanism behind the BB token, we need to fix the last but essential part of any option products, i.e. the price.

Since the option designed above is a perpetual American option which does not contains the time to expiration term, the BS model CANNOT empower us to price the bull as well as the bear option. That’s why Antimatter comes up with its unique method proposed in the V2 whitepaper.

I’m NOT going to explain the detailed deducing process with math formulas but some key ideas and concepts. The most essential concept above all is that because the deposit is used to mint BB token in an option product, so intuitively the asset value equals to the sum of value of bear tokens and bull tokens, and by dividing asset value into various parts and constructing each of them, one can deduce the option price.

It has constructed the form of assets value based on three principles:

• when the ratio of total issuance of bull token to the total issuance of bear token approaches to 1, then the price of bull token rises to approach 1 whereas the bear token falls to 0, and vice visa. ( in doubt)

• when the underlying asset (e.g. USDC) value rises, it requires more bear tokens than bull tokens, whereas the E asset (e.g. ETH) value rises, it needs more bull token than bear tokens.

• Derivatives of total asset value (z) with respect to the total issuance of bull token (x) as well as the bear token (y) must greater than 0, since them represent the price of bull token and bear token respectively.

After trying a great amount of forms, it has finally come with the following form in its V2 whitepaper. If the two sides do not equal to each other, then, as it’s statemented in the whitepaper, one can arbitrage to rebalance it.

It seems pretty great right? Let’s go deeper to find out what’s behind the whitepaper V2.

In its V2 whiterpaper, the asset value had been built as the above formula, it’s naturally to test whether the price is actually calculated based on this. By comparing the outcome of the calculator provided by the Antimatter with the results deduced manually based on the V2 formulas, I’ve found that there’s a great gap between the two.

Is this project a scam? or am i missing something?

By decomposing the formula and reconstructing it, I’d tried many many forms before finally found one that suited rather well with the outcome calculated by the calculator. In the mean time, i’ve also found one little excel, improperly named in the github, that further verified the correctness of my conclusion, i.e. Antimatter has NOT used the formula provided in its V2 whitepaper, but rather has used the following one:

Given that the excel proposed exactly the same time as the whitepaper, it’s reasonable for us to suspect the preciseness of the whole project. Would there be some same mistakes during the coding process and other sorts of things?

Besides these, there’s some essential parts remain absent which would make the whole BB product useless.

• one can only buy and sell tokens and is unable to exercise the option both in mainnet and testnet, which makes the whole option products useless.

• unable to create new option products freely both in mainnet and in testnet.

• unable to switch bull and bear token among various holders.

• Without the implementation of an oracle to track the market price of underlying asset, it is almost impossible for a new-born project barely relays on the arbitrage to track the correct price. See the ETH market price in its protocol below, which is total deviated from the correct one.

• Too many arbitrage assumptions, some might not even work.

  The price of BB token is not determined by the assets value but also the market demand-supply relationship, then if the BB token value deviates from the assets value, arbitrage activities would happen to rebalance the value equation by minting more over-valued token to supply more ( however, the absence of the creating function constraints the arbitrage activity in the end dampens the whole system) .

  Moreover, the when the market price of the underlying assets deviates from the real price, it relays on the so-called arbitrage to sell the over-evaluated token to rebalance the strike price. However, i donot see this mechanism could ever work, since the mint process would only influence the token price not the strike price.

• The doc, full of mis-spelling words, out-of-date information, absence of any statement about the core mechanism, un-friendly to readers.

Index nft

• This product allows people to trade indexes in NFT format with a variety of underlying assets combination.

• When you buy an index, the contract will automatically purchase underlying assets from the market and then generate the NFT index for buyer.

• to sell the index, the seller will burn his piece of NFT index and liquidate the underlying asset

locker

• NFTs can be used as a locker for crypto assets. Use cases include digital safe with an unlock schedule, or gift that user can reward to people. One can select asset to put into a locker NFT and choose a release schedule for the token.

Antimatter DAO is a club with features including on-chain governance, multi-party treasury management, academic resources sharing, and new model experiments.

Members:

• Tekin Salimi, the general partner of Polychain Capital and a strong believer and advocate of DAO. Salimi believes that the continued use of DAOs to be of the utmost importance to the next evolution of the blockchain industry.

• Do Kwon, the Co-founder and CEO of Terraform Labs, the company behind the Terra Blockchain. Terra strives to use blockchain technology to develop a more efficient payment system.

• Justin Sun, the founder of Tron foundation, an ambitious project dedicated to building the infrastructure for a truly decentralized Internet.

• Brian Lee, partner at Alameda Research Ventures, a quantitative trading firm bringing expertise from Wall Street and Silicon Valley to provide liquidity in crypto markets worldwide.

There’s two audit reports about AntimatterFinance contract and MATTER/ASAP contract respectively, both have published in its github repository.

Key conclusions of AntimatterFinance contract:

• these contracts are well-designed and engineered, though the implementation can be further improved by resolving a few tiny issues.

• there’s some extra power to the privileged account, such as governor, admin, authority, which can be a counter-party risk to the contract users. In addition, these still remains to be fixed in its latest version.

  • e.g. authority can transfer the Call/Put tokens from the Antimatter Finance users without restriction.

  • admin or governor can set the key parameters for the Antimatter Finance protocol.

  • admin or governor to transfer the governor role to the newGovernor.

Although, the audit report does not covers the logic behind the product itself, i manually go through the whole code and find that it’s indeed correct.

Key conclusions of MATTER/ASAP contract:

• There’s no ERC20 compliance issue found by the auditor, although the privileged account issue still exists.

• the other issues had already been fixed.

• the audit report of AntimatterFinance is only about its first version of call-put option contract , which can not insure the security of the latest version of the contract, as well as the rest products e.g. Antimatter NFT, Dual Investment, since audit report only covers the call-put option products.

• the audit report MATTER/ASAP contract is not so helpful since this contract is merely used to deal with the token’s ERC20 compatibility as well as the initial supply of 100 million tokens to different parties.

• there’s one underlying github repository contains code info hidden by the team as all the public link in this doc as well as the website goes to another repository. Moreover, there’s no code of dual investment contract public even in the hidden repository, which rises the worry of the whole project’s security.

The utility of MATTER:

• provides incentives to the participates.

  Given that additional MATTER will be awarded to a user based only on its actual usage, activity and contribution on Antimatter, e.g. which includes participation in the project’s governance, creation and redemption of options (not yet), liquidity provision (not yet) .

• pay protocol fees , including option generation and redemption fees and protocol transaction fees.

• In the Antimatter NFT, matter is used as the payment currency for NFT transactions and creators reward claims.

• MATTER is used as a governance token for protocol DAO management.

According to the OlympusDAO design, the team has refined the tokenomics of three parts:

• Trading incentives. TBA

• Antimatter Bond. TBA

• Staking.

Staking does not have any lock-up mechanism and one can stake and unstake anytime as he wants. Antimatter DAO Staking adopts a dynamic APY mechnism. The annual reward pool contains 400,000 $MATTER.

No token would be given back to the staker.

Up till today, RBN has been a pure untradable “governance token” — it has been used to vote on governance proposals including changing of fee models, how to utilize the treasury funds, creating liquidity mining programs, and so on.

Yet it plans to introduce some adaption with the same model in mind as veCRV:

• Staked Ribbon (sRBN).

  RBN holders can opt-in to stake their RBN and receive sRBN in exchange. The longer users stake their RBN tokens, they will get in return:

  • More voting power (e.g the ability to control which vaults rewards accrue to)

  • Boosting of future RBN rewards

  • Outsized proportion of protocol revenue

Ribbon plans to rollout 2 new programs in the next few months:

• Vault Deposit Incentives

  There will soon be a new revamped RBN emissions program, but which vault these rewards go to will be controlled by sRBN holders. For example, large depositors in the ETH Covered Call vault may choose to acquire and stake RBN to acquire as much voting power as possible to redirect emissions into that vault.

• Permissionless Vaults

  The Ribbon protocol will also support permissionless vaults in the future — anyone will be able to create their own Ribbon Vault that supports any asset or any strategy. In this universe, people can also acquire and stake RBN to bootstrap their vault and redirect more people to use it.

By an aside, the sRBN token uses fully on-chain governance, specifically the Governor Bravo system, which allows governance proposals to get executed autonomously instead of through loose consensus via a Snapshot vote and multisig execution.

• Staked Matter (sMatter).

  Holding a larger amount of sMatter would be given to more voting power e.g. the ability to control which vaults rewards accrue to, Boosting of future RBN rewards, Outsized proportion of protocol revenue.

• Bond

  Using bonds to gain the underlying assets in the liquidity pool, which is an essential apart to Dual Investment. This may require not only the BSD, BUSD-MATTER LP, but other assets like BTC depending on the services provided.