Something we heard quite a lot when pitching BullvBear to investors and traders, is that if you take a pumping collection at a specific time, almost everyone will be on the bull side or on the bear side.

A collection pumps really strong, sales start to go down, listings increase. You might think everyone will be bearish on the collection.

Here’s the trick: it depends on the price and on the timing. You might think it will go down in the next few months by at least half of its current floor. Fine. But what about the floor price evolution in the next 24 hours ? You might be bullish in that case.

That’s the whole concept BullvBear will enable traders to play with.

Only pumping collections to trade

On the homepage you’ll find a list of 4 to 6 collections available for trading at any time. We are selecting from all collections available on the spot market only the pumping ones (high 24h volume and 24h volume variation) with affordable floor prices (in the 0.1Ξ to 1.5Ξ range).

The list will be updated based on collection data. A collection might appear on our marketplace as volume pumps, and disappear a few days later because the volume went down.

We want traders to have fun on BullvBear while being time efficient. Reducing the choice to the most traded collections will enable more focus and faster time to profit.

You can buy or sell NFTs at the settlement price

BullvBear settlement price is determined based on the collection spot data (volatility, volume, floor price) and bullvbear data (number of buyers and sellers at last round of pricing). The settlement price is below the current collection floor price and the delta to floor usually sits between -20% to -5%.

This is the price for which traders can take a buy or a sell order on BullvBear.

• Traders taking a buy order will pay the settlement price to get any NFT from the collection at any time before the settlement deadline.

• Traders taking a bear order will lock a security deposit to be able to sell an NFT from the collection at anytime before the deadline

If the floor price lands below the settlement price, bears win, above, bulls win.

The settlement deadline is another parameter determined by BullvBear from spot and BvB market data. The higher the volatility, the lower the duration.

Long story short, take Buy Orders if you’re bullish on a collection to get NFTs below the floor price. Take Sell Orders if you’re bearish on a collection to short NFT collections.

While we all know that trying to buy low and sell high, we are NGMI, we always think there’s a chance to win.

In the NFT space it’s even worse because of the extreme volatility and concentration. At some point, without knowing why, everyone on Twitter starts talking about a collection. At first, you try to resist the FOMO, but you end up a few days later aping in.

You go to a marketplace and overpay to get a few NFTs. After a few days of sales slowing down and prices going down, you realise there is no exit liquidity and you want to get out.

But you’re not the only one. After the pump, new buyers are waiting for the price to bottom and many flippers that came late to the dance also want to get out. That’s when the dump starts.

In a few days the collection price crashes and you’re either stuck on the long term or you take an immediate loss.

This is a well known pattern for traders, but apart getting in as early as possible and hold on the long term, there’s not many alternatives. As good degens we fall into the same trap again and again.

BullvBear offers an alternative to traders: buying and selling NFTs in the future.

• If you’re bullish on a collection, go on BullvBear and take a buy order. You will pay an amount that is lower than the current floor price to get your NFT not right now but in a few hours or days depending on the collection.

• If you’re bearish on a collection, go on BullvBear and take a sell order. You don’t need an NFT to sell it in the future. Instead, you put a small security deposit to be able to sell any NFT from the collection before the deadline. If prices are going down, you’ll buy an NFT on the spot, and sell it to the contract in a single transaction. You will cash out the difference and will have made a profit on the downfall.

Why is it offering an interesting alternative to the spot market ?

If you’re bullish on a collection that is pumping you have a risk of buying at the top. By buying your NFT on BullvBear, you minimize your risk. Even if it’s going down later, you would have bought your NFT at a discount.

If you’re bearish on a collection, well, there is nothing you can do right now on spot marketplace to profit when it’s going down. You think you’ve detected the top ? Go on BullvBear and take a sell position. Also, shorting could be a very risky mechanism. So we designed our protocol to cap the loss if the collection ends up mooning.

Simply put we are offering a way for traders to manage their risk.

But the most degens could also use it as a way to push their gambling to the next level.

We’re launching our closed mainnet next week. Stay tuned 😎

Then the bear market hit. Traders became less excited about our drop and we decided to postpone our launch. Talking to them, we put the finger on a much more interesting problem to solve.

First, we realised that there wasn’t any easy and reliable way to short NFT collections. When it is crashing, you can’t make a profit from it.

But we also understood talking with all the market participants (funds, market makers, pro traders), that beyond speculation, options were absolutely needed for the NFT space to grow.

Options are financial contracts between two parties that commit to buying or selling an asset in the future at a determined price.

While options are heavily used by traders in TradFi (numbers) and DeFi (numbers), we rapidly understood through customer research that despite NFT traders needing options, they don’t want to handle the complex concepts attached to it. So we had to do as much as we can to reduce the complexity.

But another major challenge when you create a new market and a new exchange is to get enough liquidity so that when a user wants to take a position on your platform, he is able to. If not, there is a big chance he won’t come back. And it’s tough, because we’re not only creating a new marketplace, we’re also creating a new asset class.

When we started developing BullvBear we’ve had these 2 priorities very clear in our head: make it as simple as possible and prioritise liquidity above anything else.

Here are the top hypothesis we took to design our product:

• A short time to value. Our platform should provide value to traders as soon as they start using it. We heard from traders that the ability to short collections and to get NFTs at a discount were top priorities - so we designed our protocol around these. But also the duration of the options should be short to make the experience enjoyable and bring value rapidly.

• The experience should feel familiar. We have designed BullvBear to look and feel like using an NFT marketplace where traders buy and sell assets at a price. It should be clear for traders on the platform why they are here and what they should do next.

• Matching with someone should be quick. To do so we are reducing the number of variables as much as we can. There will be only a limited number of collections available on the platform (all the collections with the most activity right now with an affordable floor price). And most importantly a single price (and type of option) for each collection.

• Using the product should feel fun. Derivatives are complex and boring. NFT traders expect to find new ways to make profit, but they want to have fun in the process. Social and community features are high on our roadmap as well as a point system to reward our most degens users.

• We work for degens. We need to start by building a community of fervent users, who are going to evangelize the product, the trading strategies, the vision. So we focus on the smaller collections, the pumping and volatile ones rather than on the blue chips. This way we make more users happy.

As soon as we crack this 0 to 1 challenge and prove that there can be a liquid NFT option market we have many opportunities to scale it:

• Work with market makers to increase the liquidity on the platform

• Work with lenders to provide their clients with downside protection to avoid liquidation

• Integrate with marketplaces to provide traders a one-click experience to access options from the spot market

• Include social features to enable traders to have a more detailed view on our market, pool multiple traders in a single position to make it more affordable on high floor collections and enable batch order to seamlessly take multiple positions on a collection.

We are already in touch with some of the top players in the space for this 2nd step. If you’re a lender, a marketplace or a market maker we would love to have a chat: gm@bullvbear.xyz

Above, the world’s first stock exchange - the Amsterdam Stock Exchange, built by Hendrik de Keyser in 1608

Do we really need all of that ?

NFTs #1 use case shouldn’t be speculation. But speculation, new financial primitives and services are absolutely critical to make the market efficient.

Ultimately NFTs should serve creators to fund projects and rewards contributors, and collectors to access exclusive communities, services, products, while getting some of the upside being there early.

For more creators and collectors to join the space, the market needs to be more robust. During NFT summer everything was going up, driving billions of dollars in investment from collectors to fund new projects.

But as soon as the prices start to go down, volume and liquidity crash, as well as the number of new projects. This ultra-high volatility is blocking new entrants to onboard the space.

The liquidity issue could be solved with a strong ecosystem of pro traders and market makers. But right now, their strategies are limited to buying and selling NFTs on spot marketplaces.

They need a better tooling and derivatives, especially options, are the obvious next steps.

Obvious but not that simple. Options are complex to understand and complex to use. And options are NGMI in the space without a very heavy lifting. NFT traders need them but they are not ready to handle what comes with them - expiration dates, premium, collateral and strike prices.

Good news, we worked super hard in the past 6 months to ship the simplest NFT option product possible. Stay tuned.

Illustration of this article, “professional degen 4” by OSF, available on SuperRare.