Public blockchain networks allow developers to build innovative products utilizing existing protocols thanks to the composable nature of DeFi and the powerful functionality of NFTs. This is incredibly difficult in traditional finance, given the gated nature of private networks, the lack of interoperability between systems, and the controlling nature of centralized organizations. 

By leveraging the power of ERC-721s, entirely new NFT-based economies can develop on public networks such as the Ethereum blockchain. Non-Fungible Tokens can represent real-world assets, goods in a digital economy, creator-produced media, and more. By combining digital assets, smart contracts, and public protocols, we have the building blocks for an open metaverse. 

Wasabi believes that much of the future economic activity will take place digitally in metaverses, hosted by public networks. There are currently a few projects, such as Yuga Labs’ Otherdeeds and Sandbox, that are building their closed metaverses, but the winning one is open: it is not owned or governed by a single entity.

First, financial markets and asset standards must be established for an economy to thrive. Many on-chain ecosystems, including DeFi protocols and metaverses, have microeconomies. A foundational reason the United States has been able to generate a sustained level of capital investment throughout the years is its vibrant financial ecosystem with a large variety of financial products - along with its implementation of common standards across different financial assets and liabilities.

At Wasabi, we want to lend our financial primitives to the rest of the Open Metaverse and build a vibrant NFT-based digital economy. To construct this digital economy, one must first build established financial markets. With the on-chain representation of any asset through the ERC-721 standard in any future metaverse, Wasabi will act as a core financial primitive for NFT Economies, allowing more efficient and liquid markets to emerge.

Liquidity is a key component of an established financial ecosystem. Real World Assets (RWAs), such as real estate, barrels of oil, or blocks of gold, are illiquid or have a high entry price for retail investors. Options and derivatives for these RWAs allow users to bet on price fluctuations while providing price stability for entities dependent on the commodities. By generating more activity, options increase the liquidity and adoption of the overall ecosystem.

Similarly, some NFT markets are illiquid or have a high entry price for retail. Selling options on these enable market participants to capitalize on market swings and hedge against downturns. Contrary to RWAs, NFTs are represented securely and efficiently on-chain without any real-world maintenance cost, enabling Wasabi to create a low-risk and affordable covered options protocol. Since Wasabi options are fully collateralized, the exercise of an option triggers a corresponding trade in the spot market. Once the option is in-the-money, the issuer shares the cost of increasing the floor with the trader, matching bids and listings on the spot market more efficiently. This creates buy pressure on the spot market, increasing activity and liquidity for marketplaces and Automated Market Makers (AMMs).

Most perpetual and derivative protocols have supported more liquid tokens such as $ETH and $BTC, which are most analogous to currencies. On the other hand, governance tokens of Decentralized Autonomous Organizations (DAOs) are more similar to stock options. In traditional finance, stock options are sold in contracts, where each contract represents 100 shares of the underlying stock. If a similar approach were taken for tokens such as $WOOL, an option contract with a bundle of tokens would be most efficiently represented on-chain as an NFT.

Wasabi LPs could issue options on a bundle of tokens as well as exotic NFTs, such as Uniswap V3 LP Tokens. Uniswap automatically issues these NFTs (LP Tokens) to the liquidity providers (LPs) as a receipt of funds and a summary of their contract. This creates a metamarket for liquidity locked in the protocol. LPs who want to issue options on their liquidity in Uniswap could deposit their LP Token into a Wasabi pool to write options on the ERC-20 token pair. Once an option is issued on Wasabi, liquidity on Uniswap curve would get collateralized. This would generate 2 benefits for Uniswap LPs:

1. Utilize liquidity locked in a curve to issue options and collect premiums.

2. Hedge against impermanent loss on Uniswap liquidity pool by letting the market reserve a capped price in advance.

Another important aspect of financial markets is the ability to hedge positions using derivatives. A position could be an NFT-backed loan. In this particular example, a borrower put up their Doodle as collateral, and a lender accepted it to provide a liquid loan. The agreement was to lend a Doodle holder 5.5 ETH in exchange for 99% APR on his loan (0.1 ETH profit by the end of the week). When the loan expired a week later, the Doodles floor had dropped to 4.9 ETH, the borrower, of course, opted to default on the loan, and the lender was stuck with the NFT and a 0.7 ETH unrealized loss. Using Wasabi, the lender could have purchased a put option on Doodle at a strike price of 5.6 ETH to hedge against a material drop in floor price. They would have secured the option to sell the Doodle at 5.6 ETH regardless of how low the floor went - paying only the option premium to purchase cash insurance on their NFT-backed loan.

Another good example is resources in Play-to-Earn (P2E) games. Suppose you were playing Wolf Game, where you have land, sheep that produce wool, wolves that capture sheep, and farmers that can multiply your capabilities. In this microeconomy, options have various use cases. For example, if there is a surplus of sheep in the game, you might predict that your sheep will decrease in value soon and hedge that by buying put options on sheep. If you want to buy some wool in the near future but anticipate the price of wool increasing, you could buy a call option to ensure steady prices on future supply.

What you come to realize is that the wolf game mechanics mirror many economies that exist today and will exist in the metaverse (and outside). Sheep are resources, the wool produced is goods and services, farmers are assets that increase your output, such as machinery, and wolves are other stakeholders with adversarial interests.

Wasabi will lead the charge in building an extensive NFT options ecosystem for digital economies of the Open Metaverse.

Wasabi’s goal is to become the primitive that allows economies to plug into a futures ecosystem, empower participants with tools to interact with a digital economy more efficiently, and generate more liquid markets. With the limitless possibilities in building an open metaverse and the tools to build a flourishing digital economy, we are looking for ecosystem partners. Here are some examples of protocols we would love to partner with:

• Market Makers who want to generate steady interest by issuing options.

• Marketplaces and AMMs who want to increase transaction volume.

• NFTFi lending protocols, which are looking to provide insurance for lenders looking to earn more interest by depositing higher principals.

• NFTFi derivatives projects interested in building structured products.

• NFT projects looking for additional market making with their treasuries.

• Open metaverses seeking to foster more sophisticated economic activity.

Wasabi is the option primitive connecting all stakeholders, the gateway to more efficient markets in the open metaverse. If you want to help build financial infrastructure for the Open Metaverse and utilize our infrastructure to develop exciting new economic systems, hop into our Discord and drop us a !wasab!

Public blockchain networks allow developers to build innovative products utilizing existing protocols thanks to the composable nature of DeFi and the powerful functionality of NFTs. This is incredibly difficult in traditional finance, given the gated nature of private networks, the lack of interoperability between systems, and the controlling nature of centralized organizations. 

By leveraging the power of ERC-721s, entirely new NFT-based economies can develop on public networks such as the Ethereum blockchain. Non-Fungible Tokens can represent real-world assets, goods in a digital economy, creator-produced media, and more. By combining digital assets, smart contracts, and public protocols, we have the building blocks for an open metaverse. 

Wasabi believes that much of the future economic activity will take place digitally in metaverses, hosted by public networks. There are currently a few projects, such as Yuga Labs’ Otherdeeds and Sandbox, that are building their closed metaverses, but the winning one is open: it is not owned or governed by a single entity.

First, financial markets and asset standards must be established for an economy to thrive. Many on-chain ecosystems, including DeFi protocols and metaverses, have microeconomies. A foundational reason the United States has been able to generate a sustained level of capital investment throughout the years is its vibrant financial ecosystem with a large variety of financial products - along with its implementation of common standards across different financial assets and liabilities.

At Wasabi, we want to lend our financial primitives to the rest of the Open Metaverse and build a vibrant NFT-based digital economy. To construct this digital economy, one must first build established financial markets. With the on-chain representation of any asset through the ERC-721 standard in any future metaverse, Wasabi will act as a core financial primitive for NFT Economies, allowing more efficient and liquid markets to emerge.

Liquidity is a key component of an established financial ecosystem. Real World Assets (RWAs), such as real estate, barrels of oil, or blocks of gold, are illiquid or have a high entry price for retail investors. Options and derivatives for these RWAs allow users to bet on price fluctuations while providing price stability for entities dependent on the commodities. By generating more activity, options increase the liquidity and adoption of the overall ecosystem.

Similarly, some NFT markets are illiquid or have a high entry price for retail. Selling options on these enable market participants to capitalize on market swings and hedge against downturns. Contrary to RWAs, NFTs are represented securely and efficiently on-chain without any real-world maintenance cost, enabling Wasabi to create a low-risk and affordable covered options protocol. Since Wasabi options are fully collateralized, the exercise of an option triggers a corresponding trade in the spot market. Once the option is in-the-money, the issuer shares the cost of increasing the floor with the trader, matching bids and listings on the spot market more efficiently. This creates buy pressure on the spot market, increasing activity and liquidity for marketplaces and Automated Market Makers (AMMs).

Most perpetual and derivative protocols have supported more liquid tokens such as $ETH and $BTC, which are most analogous to currencies. On the other hand, governance tokens of Decentralized Autonomous Organizations (DAOs) are more similar to stock options. In traditional finance, stock options are sold in contracts, where each contract represents 100 shares of the underlying stock. If a similar approach were taken for tokens such as $WOOL, an option contract with a bundle of tokens would be most efficiently represented on-chain as an NFT.

Wasabi LPs could issue options on a bundle of tokens as well as exotic NFTs, such as Uniswap V3 LP Tokens. Uniswap automatically issues these NFTs (LP Tokens) to the liquidity providers (LPs) as a receipt of funds and a summary of their contract. This creates a metamarket for liquidity locked in the protocol. LPs who want to issue options on their liquidity in Uniswap could deposit their LP Token into a Wasabi pool to write options on the ERC-20 token pair. Once an option is issued on Wasabi, liquidity on Uniswap curve would get collateralized. This would generate 2 benefits for Uniswap LPs:

1. Utilize liquidity locked in a curve to issue options and collect premiums.

2. Hedge against impermanent loss on Uniswap liquidity pool by letting the market reserve a capped price in advance.

Another important aspect of financial markets is the ability to hedge positions using derivatives. A position could be an NFT-backed loan. In this particular example, a borrower put up their Doodle as collateral, and a lender accepted it to provide a liquid loan. The agreement was to lend a Doodle holder 5.5 ETH in exchange for 99% APR on his loan (0.1 ETH profit by the end of the week). When the loan expired a week later, the Doodles floor had dropped to 4.9 ETH, the borrower, of course, opted to default on the loan, and the lender was stuck with the NFT and a 0.7 ETH unrealized loss. Using Wasabi, the lender could have purchased a put option on Doodle at a strike price of 5.6 ETH to hedge against a material drop in floor price. They would have secured the option to sell the Doodle at 5.6 ETH regardless of how low the floor went - paying only the option premium to purchase cash insurance on their NFT-backed loan.

Another good example is resources in Play-to-Earn (P2E) games. Suppose you were playing Wolf Game, where you have land, sheep that produce wool, wolves that capture sheep, and farmers that can multiply your capabilities. In this microeconomy, options have various use cases. For example, if there is a surplus of sheep in the game, you might predict that your sheep will decrease in value soon and hedge that by buying put options on sheep. If you want to buy some wool in the near future but anticipate the price of wool increasing, you could buy a call option to ensure steady prices on future supply.

What you come to realize is that the wolf game mechanics mirror many economies that exist today and will exist in the metaverse (and outside). Sheep are resources, the wool produced is goods and services, farmers are assets that increase your output, such as machinery, and wolves are other stakeholders with adversarial interests.

Wasabi will lead the charge in building an extensive NFT options ecosystem for digital economies of the Open Metaverse.

Wasabi’s goal is to become the primitive that allows economies to plug into a futures ecosystem, empower participants with tools to interact with a digital economy more efficiently, and generate more liquid markets. With the limitless possibilities in building an open metaverse and the tools to build a flourishing digital economy, we are looking for ecosystem partners. Here are some examples of protocols we would love to partner with:

• Market Makers who want to generate steady interest by issuing options.

• Marketplaces and AMMs who want to increase transaction volume.

• NFTFi lending protocols, which are looking to provide insurance for lenders looking to earn more interest by depositing higher principals.

• NFTFi derivatives projects interested in building structured products.

• NFT projects looking for additional market making with their treasuries.

• Open metaverses seeking to foster more sophisticated economic activity.

Wasabi is the option primitive connecting all stakeholders, the gateway to more efficient markets in the open metaverse. If you want to help build financial infrastructure for the Open Metaverse and utilize our infrastructure to develop exciting new economic systems, hop into our Discord and drop us a !wasab!