SIREN Markets is a decentralized protocol for creating and trading fully-collateralized options for Ethereum tokens.
As such, can use SIREN’s custom-built automated market maker (AMM) to easily tokenize both sides of an option contract as semi-fungible ERC-1155 tokens. This unique model offers flexibility to both traders and underwriters, the latter simply being liquidity providers (LPs) to the AMM.
SIREN’s builders recently unveiled its optimized V2 system on Polygon to support rapid and inexpensive transactions. Now the name of the game is supporting more assets, which brings us to this week and the project’s newest integrated asset, the DeFi Pulse Index (DPI) — DeFi’s top index token!
A quick refresher: SIREN Markets 101
The SIREN protocol fundamentally caters to two stakeholders: traders, who buy options through the project’s AMM, and LPs, who supply liquidity to the project’s pools and thus underwrite the pools’ options per demand.
Zooming in further, SIREN offers traders the benefit of being able to speculate on and hedge against the volatility of top DeFi tokens with on-chain, trustless settlement. Conversely, LPs earn a premium for every trade through their pool + $SI governance token rewards while SIREN is running a liquidity mining program.
So you’re caught up on the basics of SIREN. Let’s now dive into how you can earn a cut of those aforementioned premiums + rewards by providing liquidity to the new $DPI pool via the SIREN Tradewind program !
How to become a $DPI underwriter
Before getting started with SIREN, remember that the protocol’s V2 system is live on the Polygon network. This means you’ll need to switch your MetaMask or WalletConnect wallet over to the Polygon network and have some $MATIC for gas, so you can access your funds on V2.
After you’re prepped on the Polygon side of things, you’re ready to start underwriting $DPI liquidity to earn fees and rewards. To join in, you would follow these steps:
- Head over to app.sirenmarkets.com/pool and connect your wallet.
- In the main pools’ dashboard (as depicted above), select the DPI / USDC Calls (DPI) option.
- A sidebar will appear and prompt you to choose how much $DPI you want to deposit, as this is the pool’s collateral asset.
- Input how much $DPI you’d like to supply, at which point SIREN will estimate how many LP tokens you should receive. If everything looks good and you choose to proceed, complete the supply transaction in your wallet.
- Then SIREN will automatically split your pool-bound $DPI liquidity into the project’s native bTokens, i.e. buyTokens, and wTokens, i.e. writeTokens. The former go to buyers, the latter stay in the pool initially.
- Now you’ll officially be earning premiums, fees from trading slippage, and $SI rewards until you withdraw your liquidity.
- Withdraw through the same interface you deposited through whenever you want to. Keep in mind that when you do withdraw, you’ll receive your pro-rata share of the pool’s collateral and unexpired wTokens.
- To access the collateral in these wTokens, “close” them via SIREN’s Portfolio page or wait for their contracts to expire.
📢 Sounding the SIREN
$DPI is one of DeFi’s top assets. By integrating the index SIREN Markets is helping carve out the early frontier of $DPI options, something which more than a few people in DeFi now stand to enjoy in efficient fashion!
Today’s post thus got you up to speed on how to underwrite $DPI options on SIREN, yet if you’re interested in recapping how to trade and stake through the platform be sure to catch our previous drop post about all things SIREN V2.
If you want to keep up-to-date on DPI rebalances and other DeFi Pulse Indices, access our Indices section.
Lastly, consider following SIREN on Twitter or joining the project’s Discord so you can stay up-to-date with all the newest assets and features the SIREN team rolls out! $DPI options are surely only the first of many additions coming to the protocol going forward.
Disclosure: This post is part of our paid promotional DeFi Pulse Drop series; We’ve partnered with SIREN to help educate and inform the community about Siren Markets. As always, we’re committed to providing the entire community with quality, objective information, and any opinions we express are our own.