Hegic

Hegic is a decentralized, peer-to-pool options trading protocol operating on the Ethereum blockchain and Arbitrum. The protocol was introduced on February 20, 2020, by its pseudonymous founder and sole developer known as Molly Wintermute. The name is a composite of two characters from William Gibson's science fiction novel "Neuromancer": Molly, a mercenary, and Wintermute, an artificial intelligence. Wintermute, who remains anonymous, has stated they have no formal background other than their open-source code on GitHub. The project had a challenging start, facing a bug hours after its initial launch which required the founder to process refunds.

The platform enables users to trade non-custodial call and put options for assets like Wrapped Bitcoin (WBTC) and Ethereum (ETH) without requiring KYC or registration. It simplifies the traditionally complex world of options trading by offering a straightforward interface where users can select an asset, strike price, and expiry period to purchase an options contract. One of its distinguishing features is the ability for users to choose customized strike prices and expiration dates, a flexibility typically reserved for over-the-counter (OTC) markets. This is made possible through a pooled liquidity model.

Hegic's business model revolves around two key participants: options buyers and liquidity providers. Buyers pay a premium to acquire options contracts. Liquidity providers deposit their assets (like WBTC or ETH) into pools, which are then used to underwrite the options sold on the platform. In return for providing this liquidity, they earn a share of the premiums paid by the buyers. The protocol also generates revenue from a 1% settlement fee on all options, which is distributed to stakers of its native token, HEGIC. This peer-to-pool mechanism functions similarly to an automated market maker (AMM) for options.

The protocol's native ERC-20 token, HEGIC, was launched on September 9, 2020. It serves multiple functions within the ecosystem, including governance, staking, and rewards. HEGIC holders can stake their tokens to receive a portion of the platform's settlement fees, paid out in ETH and WBTC. Staking also provides holders with benefits like discounts on hedge contracts and priority for unlocking liquidity. The total supply is fixed at 3,012,009,888 HEGIC, with allocations for early contributors, a development fund, liquidity and utilization rewards, and public distribution.

Keywords: decentralized options, peer-to-pool trading, DeFi protocol, Ethereum, Arbitrum, crypto options, non-custodial trading, Molly Wintermute, HEGIC token, liquidity pools, on-chain options, WBTC options, ETH options, hedge contracts, liquidity provider, settlement fees, crypto derivatives, staking rewards, AMM for options, decentralized finance