The design of the decentralized leveraged binary options market relies on a simple, base liquidity structure and governance token setup. The overarching platform is called the Binary Options Market (BOM). The liquidity provisions structure for BOM is called BOLP (Binary Options Liquidity Providers). BOLP functions as “the house” or the means of betting against Binary Options Traders. The Binary Options Governance (BOG) token is used to vote on new markets, collateral, and treasury decisions.

The BOM accrues real yield via two pathways, Open Position fees and trader losses. A 0.02% fee is taxed for every position opened as WAVAX. The losses of poor traders are also distributed to BOLP and BOG as WAVAX.

Both of these fee accrual mechanisms are defined as real yield as they are based on platform usage. 70% of the real yield is distributed to BOLP holders, and 30% of the yield is allocated to (BOG) stakers as WAVAX.

Each BOM token (BOLP & BOG) can earn esBOG as a means of incentivization. The BOG that is distributed as esBOG will have a 2-year escrow mechanism, similar to esGMX & esKLO. Maintaining the limited supply is an important balance in the BOM model.

The leverage of the position is set to a curve, allowing for a maximum of 5x leverage. A 2.5x leverage correlates to a 100% collateral liquidation. A minimum position’s leverage is 1.1x which correlates to 5% liquidation.

The BOM model will have maximum position sizes based on pool depth. The maximum bet in the BOM is determined as follows:

This formula allows for simple rational limitations as the BOM is in its beta phase. As BOLP deepens and risk models are adjusted, the maximum bet size will also increase. This can be managed with esBOG governance decisions.

BOM tokenomics is broken down into esBOG allocations (BOLP Staking & Platform Usage Rewards), TGE allocations (Airdrop & LP), and vested allocations (Treasury & Team). Individuals looking to fork this protocol will arguably alter this portion for greedier team allocations or overweight treasury and siphon off that way. Investors need to do proper due diligence.

BOM can look to expand the BOLP to include non-AVAX assets. This would allow for BOLP to be a diverse basic of goods. Below is an example of a scaled BOLP model that include multiple underlying unique assets in the basket of goods.

Multi-asset BOMs require a unique setup for BOLP. As users deposit assets, they can choose to participate with traded assets (AVAX, BTC.b, or WETH.e) or they can supply USDC to the BOLP. This USDC is built up as a yield-bearing reserve for the platform. This USDC is used to increase margin protection and risk impairment. It is also used to help BOLP accrue stable underlying yield.

BOM has the opportunity to help scale risk in binary option markets. This also allows for a real yield system to be built around binary options for a decentralized group of participants as passive liquidity participants.

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The design of the decentralized leveraged binary options market relies on a simple, base liquidity structure and governance token setup. The overarching platform is called the Binary Options Market (BOM). The liquidity provisions structure for BOM is called BOLP (Binary Options Liquidity Providers). BOLP functions as “the house” or the means of betting against Binary Options Traders. The Binary Options Governance (BOG) token is used to vote on new markets, collateral, and treasury decisions.

The BOM accrues real yield via two pathways, Open Position fees and trader losses. A 0.02% fee is taxed for every position opened as WAVAX. The losses of poor traders are also distributed to BOLP and BOG as WAVAX.

Both of these fee accrual mechanisms are defined as real yield as they are based on platform usage. 70% of the real yield is distributed to BOLP holders, and 30% of the yield is allocated to (BOG) stakers as WAVAX.

Each BOM token (BOLP & BOG) can earn esBOG as a means of incentivization. The BOG that is distributed as esBOG will have a 2-year escrow mechanism, similar to esGMX & esKLO. Maintaining the limited supply is an important balance in the BOM model.

The leverage of the position is set to a curve, allowing for a maximum of 5x leverage. A 2.5x leverage correlates to a 100% collateral liquidation. A minimum position’s leverage is 1.1x which correlates to 5% liquidation.

The BOM model will have maximum position sizes based on pool depth. The maximum bet in the BOM is determined as follows:

This formula allows for simple rational limitations as the BOM is in its beta phase. As BOLP deepens and risk models are adjusted, the maximum bet size will also increase. This can be managed with esBOG governance decisions.

BOM tokenomics is broken down into esBOG allocations (BOLP Staking & Platform Usage Rewards), TGE allocations (Airdrop & LP), and vested allocations (Treasury & Team). Individuals looking to fork this protocol will arguably alter this portion for greedier team allocations or overweight treasury and siphon off that way. Investors need to do proper due diligence.

BOM can look to expand the BOLP to include non-AVAX assets. This would allow for BOLP to be a diverse basic of goods. Below is an example of a scaled BOLP model that include multiple underlying unique assets in the basket of goods.

Multi-asset BOMs require a unique setup for BOLP. As users deposit assets, they can choose to participate with traded assets (AVAX, BTC.b, or WETH.e) or they can supply USDC to the BOLP. This USDC is built up as a yield-bearing reserve for the platform. This USDC is used to increase margin protection and risk impairment. It is also used to help BOLP accrue stable underlying yield.

BOM has the opportunity to help scale risk in binary option markets. This also allows for a real yield system to be built around binary options for a decentralized group of participants as passive liquidity participants.

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