Buffer Finance AMA Recap (16 Sep 2021)
Hello Birdies! Welcome to our 5th Edition of the ‘No Fuss AMA’, where the birds leave all the hype aside and focus on fun, casual banter and real exchanges with upcoming projects.
Today we are truly proud to host Buffer Finance, an options protocol that’s bound to make a dent in the DEFI derivatives space. Buffer Finance will be conducting its IDO on multiple launchpads, before hosting its final leg on SuperLauncher.
It is a Thursday afterall, so grab your bird seeds, and put your wings together to welcome Ric Feynman — Founder of Buffer Finance.
Pinky — SuperLauncher: Hello Ric! Good to have you in the aviary
Ric — Buffer Finance: Hey Pinky, Nice to be here! and join all you birdies. Looking forward to an Amazing AMA
Pinky — SuperLauncher: Please give us an introduction about yourself, your co-founder and what you were doing prior to Buffer Finance.
Ric — Buffer Finance: I am Ric Feynman, co-founder of Buffer Finance. I have an engineering background and experience working in data and financial sector. My co-founder Heisenberg is a solidity developer with background in building highly scalable apps and finance. We both have been trading in crypto and options since last 3 years and identified many gaps that we thought will be able to fill up with Buffer
Pinky — SuperLauncher: Awesome — we love technical founders :) Could you tell us about what you’re building at Buffer? What are the market opportunities that you see, and the pain-points that you are trying to solve?
Ric — Buffer Finance: So in most simple words Buffer is 100% decentralised options trading platform. But unlike any other options market where a buyer and seller is involved on Buffer the position taken by a seller is taken by a Liquidity Pool.
Ric — Buffer Finance: The key issues with options trading platform is there complexity for retail crypto investors — and then lack of liquidity. At buffer we solve it by creating a liquidity pool and gamifying the user journey to make an options trading platform work like a betting game
Ric — Buffer Finance: We have built buffer for BNB first because the markets for BNB options are very rare even when it’s like among top 5 currencies mostly. So we see a lot of opportunity given the size of market in Traditional Finance which is like Multi trillion dollar and more 10X of spot trading. On the other hand — Defi options are still lagging and is much lower compared to spot trading.
Pinky — SuperLauncher: Agreed! Personally very bullish on the options space, there’s just significant room for growth! Could you tell us a little bit more about your target users for the options protocol? Who are the various user types and how would they use Buffer Finance
Ric — Buffer Finance:
- Spot Traders — They can use custom options to covert their Short and Long positions
- Speculators — These are the retail crypto investors who want to monetise their viewpoint on an assets expected/future prices.
- Projects/Service providers — There are the people who deal in BNB or hold a large sum of BNB either as service fee or Fund raise. Our options will allow them to hedge against sudden price fluctuations.
We have gamified for speculators to increase user friendliness, and accessibility
Pinky — SuperLauncher: Would you have tutorials for less experienced users who want to learn more about how to utilise options to trade the markets better?
Ric — Buffer Finance: Yes! for now we have curated some videos — we will soon be launching a series of articles and quizzes for user to understand the benefits of options and how to trade them. Also for users who have viewpoint about future prices can directly use the prediction game. Where they just tell expiration date — decide whether the price will go up or down and place their BET.
Pinky — SuperLauncher: Birdies, check out more about Options Trading Basics. When used well, it can not only optimise the cost of trading but enhance returns to your overall portfolio, and mitigate downside risk
https://docs.buffer.finance/further-readings/option-trading-basics
Ric — Buffer Finance: Well explained — adding to that options acts as great leverage so you can take a larger position with lower capital. Much better than leverage for spot trading
Pinky — SuperLauncher: So — for example, if I believe that Bitcoin will go to $100,000 by year-end. Could you explain what the difference would look like if I used options to trade it, vs using spot?
Ric — Buffer Finance: Okay! so for getting a gain of $50,000 assuming — BTC is trading at $50,000 and will go to $100,000 by end of year. You will have to invest $50,000 to get a return of $50,000
Ric — Buffer Finance: On the other hand if you just buy a call option on 1 BTC for let’s say less $5K (Approximately) at a strike price of $50,000 and it does go to $100,000 by end of year you will make $50,000 by paying just $5,000 as premium.
So spot trading return — 100%
Options Return — 10X
Pinky — SuperLauncher: So for spot i use $50,000, and gain $50,000. But using options, I could potentially use $5k, to gain $50k. Same outcome, less investment, higher ROI :) Sounds like something every investor should have in their arsenal
Ric — Buffer Finance: Exactly.
Pinky — SuperLauncher: Which are the instruments that Buffer Finance will support?
Ric — Buffer Finance: So right now we have put and call options on BNB deployed on Testnet. We will then be adding WETH — WBTC and then potentially other cryptocurrencies + top stocks as well like Apple, Amazon and Alphabet. WETH and WBTC will be there in Q4 itself
Pinky — SuperLauncher: That’s awesome — looking forward to it! Could you tell us how a person who’s afraid of a market crash, would use options to protect themselves? Let’s say i’m worried about BNB dipping and Ihold a lot of BNB.
Ric — Buffer Finance: Yeah so put options acts as a hedge/insurance against sudden price fall. So anyone can buy a put option at a strike price equal to current trading price and in case the market crashes they will get a payout equal to the fall in price. So anyone can buy a put option at a strike price equal to current trading price and in case the market crashes they will get a payout equal to the fall in price. So long term BNB holders or speculators can easily benefit from this if they are anticipating a fall
Pinky — SuperLauncher: And all the user needs to pay is the premium — which is a one time cost (just like purchasing insurance). Since we’re talking about insurance — could you tell us more about the insurance product in your roadmap?
Ric — Buffer Finance: Yes so insurance product is a key product for us it allows anyone to buy insurance against the asset they hold. It again works over our options protocol so all insurance bought are backed by a Liquidity Pool.
Ric — Buffer Finance: We have built it keeping in Mind projects raising funds in BNBs. And service providers offering services in BNBs. The insurance allows them to be more insured about the BNBs they hold. It will allow them to not deviate from the target funding — may be during the time their funds are vested.
Pinky — SuperLauncher: Yes, we certainly see the demand in this area since we often see projects concerned about funds being held in a certain crypto asset, but are uncertain about where the market is going, and are worried about how it might affect their cashflow.
Pinky — SuperLauncher: Can anyone be a liquidity provider on Buffer?
Ric — Buffer Finance: Yeah anyone can be Liquidity Provider — So whoever wants to write options can be a Liquidity Provider and being a liquidity provider you get right over all the premiums paid by the option buyers.
Ric — Buffer Finance: We are also offering $iBFR rewards to Liquidity providers who stake their $rBFR tokens — (The LP tokens offered to Liquidity providers for adding BNBs to our Liquidity pool)
Pinky — SuperLauncher: So I would provide liquidity just like I do on PCS? 50% iBFR and 50% BNB, if I want to be an LP on the options protocol?
Ric — Buffer Finance: Yeah for our Liquidity pool the Liquidity provided is purely in BNB and you get $rBFR for adding BNB. Now as more BNB accumulates in the Pool from the option premiums paid by option buyers. The LPs can withdraw higher BNBs using their $rBFR and earn yield
Pinky — SuperLauncher: So i’ll provide BNB to be an LP on Buffer Finance and get $rBFR as an LP token. I would benefit from all the premiums collected. I can then also stake $rBFR to earn more $iBFR tokens. Are there any risks of being an LP?
Ric — Buffer Finance: Yes that’s the mechanics. Talking about the Risk, it’s similar risk like impermanent loss — there can be rare cases where markets moves in sharply in a specific direction and all buyers buy only one type of option. Which is a rare case. But that will be recovered if you don’t withdraw keep your liquidity intact.
Pinky — SuperLauncher: Got it. What kind of yield can users expect from being an LP and staking their $rBFR tokens? When would these features go live?
Ric — Buffer Finance: We have kept $iBFR worth $15K (as per listing price) for farming against $rBFR token. This yield alone might be higher than 200% if you early in the game and stake $iBFR at low TVLs. Regarding the Yield from options premium — it depends upon the volume of options that are traded through our Platform. Extrapolation from our Tested results I believe it will soon pick up very fast.
Ric — Buffer Finance: As soon as we list we will be opening applications for Liquidity Providers who want to add liquidity above a certain ticket size. You will see details being published soon. Liquidity pool will be live in 2 weeks or so — everything is live on Testnet. We are just waiting for the final Audit reports to come.
Pinky — SuperLauncher: Awesome, very excited. Are the auditor names public yet?
Ric — Buffer Finance: So we have a preliminary audit from Solidity finance. But the contracts are further audited by a very well know Audit firm. We cannot release the name yet since we haven’t received the final report. But the firm is one of BSC’s shield winner.
Pinky — SuperLauncher: Amazing, that’ll go a long way in ensuring trust from users :) So let’s talk about the IDO before we wrap up.
Ric — Buffer Finance: yeah we have kept a low market cap to make sure we leave enough room for investors to realise the gains and at the same time fulfil our raise goals for enough time we start getting the revenue — which is the real test of product. Talking about revenue — we have decided to distribute 50% of our revenue as dividends directly to the $iBFR stakers. That brings a long-term value and reason to hold.
Ric — Buffer Finance: $iBFR holders will also get the chance to participate in governance proposals — including key decision like changing fee + % of revenue shared etc. We will also announce regular buybacks and in sometime allow discount over settlement fee for $iBFR holders.
Pinky — SuperLauncher: Sounds like music to the ears :) You have a 30% release on TGE for IDO participants. What can investors do with their iBFR tokens after they claim them post IDO?
Ric — Buffer Finance: So as soon as we release the tokens we will also be releasing staking pool for WBNB rewards. So investors can use the received tokens to stake $iBFR and farm WBNB. The APYs will be announced before IDO but we are planning to keep them quite high.
Pinky — SuperLauncher: Cool bird seeds! Stake iBFR and earn BNB :D Sounds like there’s a lot to do in the Buffer Ecosystem. Well incentivised with continuous loops of activities for participants. As a final question — Could you share a little bit about your roadmap and future plans? What can users expect from Buffer Post IDO?
Ric — Buffer Finance: Okay so there will be lots of aggressive feature releases post IDO. First and foremost the full ecosystem right now on Testnet will be live on mainnet. Soon after that you will see supported assets growing from WETH and WBTC to many other crypto currencies.
Ric — Buffer Finance: In Q4 itself we will also be announcing expansion to other chain. By Q1 next year we will be adding stock options like Apple, Alphabet, Tesla, and Amazon. Other than that many more features built over our options platform — to simplify options buying will be added
Pinky — SuperLauncher: Awesome, thanks Ric, that was super enlightening. Very excited about the options on tech stocks as well. Now let’s open it up for a quick community round — 5 minutes for questions from the floor
— Community Questions —
Birdie #1 — SuperLauncher: When the listing is done why tokens are released after 45 mins? How will it impact the price for traders? Also the APY will be in 2digits or 3 or 4? Is the staking ready and tested?
Ric — Buffer Finance: The 45 mins will be used to launch our staking pool so that IDO investors can stake their $iBFR — The APY tends to decrease as Total Value Locked increase what we can assure is a amount of BNBs would be added as rewards
Birdie #2 — SuperLauncher: What is the main goal you want to achieve in the next 1–3 years? What are your plans to expand and get more adoption? How do you increase crypto participants’ understanding of the Buffer.Finance project?
Ric — Buffer Finance: Major goal is to become a default options platform for the decentralised ecosystem in next 2–3 years and support as many assets as possible and make options accessible in all markets around the world.
Birdie #3 — SuperLauncher: Where did the project name “Buffer Finance” come from? What does it mean to you and why did you choose that name for your project?
Ric — Buffer Finance: Options always acts like a Buffer/hedge to prevent you from falling prices. That’s where we got inspired. I think I have covered most of the categories of questions. What do you think pinky?
Pinky — SuperLauncher: Fantastic! Yes it has been an amazing session. Thank you for being with us Ric. With that, we come to the end of our 5th Edition of the No Fuss AMA with Buffer Finance. Don’t miss the Buffer Finance IDO on 20th Sep, 2PM UTC. See you there!
— -End of AMA — -
About Buffer Finance
Buffer is a non-custodial on-chain peer-to-pool options trading protocol that works just like an Automated Market Maker (eg: PancakeSwap) where traders can create, buy, and settle options against a liquidity pool without the need of a counterparty (option writer). Buffer makes options trading accessible to everyone and much more efficient than its centralized counterpart.
Website | Deck| WhitePaper | Twitter | Telegram | Blog | GitHub | App
About SuperLauncher
SuperLauncher is a cross-chain launchpad that gives investors access to quality projects in a safe, trusted, and decentralized manner and empowers projects to raise capital with best-in-class features. SuperLauncher helps projects conduct token sales, automated listings, liquidity locks, and hosts farms on Binance Smart Chain.
Website | Whitepaper | Twitter | Telegram | Github
