On top of wStocks and other synthetics, DEUS allows users to trade and speculate on Futures (IOUs).
What is a Future (IOU)?
A Future or IOU on DEUS Swap is a token issued on the Ethereum blockchain, representing a speculative value of the potential IPO underlying asset. This allows you to speculate on the price of an asset as soon as it is announced, before the actual IPO date.
How do Futures get traded on DEUS?
- Step 1: The initial liquidity for a Future/IOU is minted in a Static Sale.
- Step 2: The Future is traded on a bonding curve based AMM.
- Step 3: The Future is converted to the wStock as the asset goes public.
What is the Static Sale?
The Static Sale is the initial sale of liquidity to traders. The Future is purchased with DEUS at a static price and a capped max amount.
How is the Future traded after the static sale?
After the static sale is completed, users can trade the Future normally using the AMM liquidity contract. The price is now based on the AMM curve chosen for the individual Future.
What if I buy the Future at 2x the static sale?
This means you expect the asset to appreciate at least 2x the price it starts trading on the real market when the IPO launches.
What if I buy the Future at half the static sale price?
This means you can sell the token immediately when the real trading starts and make a gain of 100%.
How is the Future product converted to the real asset when trading starts?
In the case of the Coinbase Future, the conversion will be based on the price in DEUS of the static sale (50 DEUS) times the time weighted average price of DEUS during the static sale (around $145). The amount of wCOINBASE in your wallet will automatically adjust.
What happens if the IPO is cancelled?
Users can continue to trade the Future as long as they believe an IPO will happen. If a user does not believe this is the case anymore, then they can sell their tokens to the AMM.