PoolTogether Community Podcast #66 with Dopex

This is the PoolTogether Community Podcast. PoolTogether is the world's number one no-loss prize savings account. You can visit pooltogether.com to deposit. You're listening to the PoolTogether Community Podcast. I'm your host, Hot Mike, AKA Tim, AKA I'm a hacker now because I did ETH Tokyo Hackathon. That makes me technically non-technical. I don't know, but I'm here with Casio from DopeX, and I'm super pumped about this podcast because we're going to learn so much and we're going to have so much fun. Casio, thanks for making time for us. Sure. Glad to be here. So let's start off as we always start off and hear your origin story. You're the main character. I guess no one wants to be the main character on crypto Twitter, But let's just say you're the main character right now. How'd you get into crypto? And then, and then if you want to continue and wrap the story in, how did DopeX start?

Sure. So I think per se, I dived into crypto pretty early. I'll say in 2013, like I was actually mining Bitcoin and Dogecoin from our like computer labs at university, but it was just sort of like a silly game for us and just more of like, oh, this is a pretty cool like technology, but never like, you know, when Pretty crazy at that time. It was just more of a curiosity. Curiosity. And then later on, I'll say around 2020, I guess I was doing a lot of like options trading on Web2. And then I sort of like thought like, hey, I see there's a lot of like, you know, degenning on crypto and Ethereum and Bitcoin. So I decided like to just take a look at what was happening. And I thought it was just way more fun. Than trading traditional stocks. So I kind of like started pretty much just trying to understand what the heck this whole like DeFi stuff was, like playing different like games on Polygon and other like up-and-coming chains. And then I kind of like tried to find like a project that was— that would let me do what I was doing on Web2 pretty much, which is like options. And that's sort of like I became a community member of our pretty much the project. And then a couple of months later, I joined the team as the lead product manager. And I've been with DopeX pretty much almost, I'll say almost like 2 years now. And pretty much, I guess the summary is like DopeX is an options platform on Arbitrum where we let you buy and sell crypto options such as Ethereum, Bitcoin, DopeX, and soon to come Arbitrum as well. So yeah, that's like on the high level per se.

And what's the origin story for DopeX?

So DopeX became from— our founders are TC and Witterblok. Both of them are pretty technical, like they're pretty much like coders and hackers and have been like working on Solidity since the early days. And pretty much they were— at least TC was like a hardcore, like, under the lips Like user, right? And he kind of like understood that there was like a gap or that needed to be filled on the options space on crypto. So he's been been working on this project for a couple of years now, like way before, like you know, DopeX works with DopeX, and he just decided like hey, we're gonna build this, set up the team, and pretty much we started like I'll say yeah twenty twenty twenty one. I'll say was when we first launched our first like options product, and pretty much we. The idea of what makes us different, I'll say, is that we kind of like, like more are more like in the research and development side of things that we have this idea that I think we can build with options and we just kind of like, you know, test it out in the public and see how it like what feedback we can get and like kind of like build the product that is packaged in a way that any, you know, any noob and degen can understand because options, you know, they're complicated. Like it's not as easy as just traditional, like, derivatives, like, you know, GMX or like Bybit. There's a lot of more complexity around it. So, like, our main focus is to make it as super easy as possible for users to use options without them even thinking they're using options per se. That's like the main goal of the platform.

So why Arbitrum?

So, you know, first of all, like, at the time that we were building this, rollups were not yet like a full thing. So we first launched our first contracts on mainnet, but pretty much they were just like farm contracts, but realized right away that there's no way you can have options products on mainnet because the gas cost is just prohibitive and will pretty much eat all of your profits as an options trader. So Arbitrum was that first rollup project that, you know, kind of like opened the gates for anyone that wanted to build on layer 2s. And we were like super hyped to launch. And so I was like, hey, why wouldn't you just launch on Arbitrum? And they were pretty supportive with us and they were still like pretty strong partners. And today, I believe like the Arbitrum community in the sense of derivatives is pretty united and we kind of like all want to help each other out in any way that we can, pretty much.

So how do you make options simple? My best friend got into options in 2021, like stock options, and was trying to get me into it too. And I was like, and we were trying to understand it and like, he's way ahead. He got in like a secret Discord group or something and was able to watch a trader with a Bloomberg terminal make some like pretty crazy keystroke trades on Tesla, that sort of stuff. And it's super intimidating, but also like, I really want to understand it. And so I'm glad we're talking today because going to teach us all and we're all going to grasp it after you, Casio, give us the options lesson. But if you could do that, and then I have another question because apparently like selling options is where it's at. Like it's a little, it's not as risky. So I wonder if DopeX covers that, but go for it. Can you just, what are options?

Right. I was just going to give you like, I guess the most high-level explanation as I can. So pretty much options are financial derivatives that gives the buyers the right But not the obligation to buy or sell an underlying asset at an agreed-upon price and date. And there are like, you know, different types of options. You can buy American options and European options. American options let you pretty much sell the option at any time, while in European options you have to wait until, you know, the expiry date pretty much to sell that or to exercise that option per se. So I kind of like treat options as insurance, let's say. And that's like the best way. At least I play with options that way. And also it's, let's say, sort of like you will use options as a way to hedge pretty much your positions that you might have. So let's say you might have bought right now, let's say Ethereum is almost like climbing to $2K and you just like, you know, ape into it, but you are a little bit nervous And you might think it might crash, you know, to $1,600 or something like that. So you might buy some put options, let's say, at a lower price that might give you, you know, some hedge in the sense that if that— if Ethereum actually crashes, you can sell that Ethereum on a higher price because that's what was agreed upon at the time of that option insurance or like, you know, purchase per se. So that's kind of like a way like I try to explain it. It's just like insurance. Depending if you, you know, if you're longing or shorting, like you can play these like with these contracts to help you, you know, reduce like, you know, the impact they might have on your positions.

And then perpetuals, they are an agreed-upon price but not time, right? It's perpetual, so there's no expiration date. Does DopeX also handle those?

Yeah, we have some sort of those products, but yeah, and also perpetuals, you can get liquidated, right? With options you can't. Like there's like no liquidations with options per se. So

that's like you're either paying a fee or you're exercising the option or you're selling the option,

right? And yeah, and on DopeX, users can buy and sell options. So you can do both actions per se.

Okay. So there's also like, you know, there's— I'm looking here at your site, there's staking yield, there's, there's, there's different things available. And so with this new version of PoolTogether, it's the PoolTogether Hyperstructure. Up until now, or with V4 of PoolTogether, you can only deposit USDC and the yield source for that USDC is AAVE. And that, that's on mainnet Avalanche, Polygon, and Optimism right now. In Hyperstructure, we're, we're going for any token, any yield source, and then we're, and then ideally, as you know, many chains as possible as we are able to roll it out. And so, when you deposit into PoolTogether, all of the yield goes into a prize pool and then prizes are distributed based on the yield. The total yield of the pool. So this is going to be pretty sweet, right? So our Arbitrum pool, we're going to Arbitrum. It's happening. That's not alpha. I mean, it's alpha because it hasn't happened yet, but we are definitely going there at launch. And so, you know, there's going to be a whole prize pool of all this yield being collected on Arbitrum that'll be given out to depositors on PoolTogether. So I'm wondering, like with DopeX, is there, there's like a, there's ways to get yield On DopeX, that isn't necessarily options trading.

So yeah, like I will be careful when I say like what how you can make deal with options because some people might just say like you're pretty much just selling volatility. But yeah, there's

right right.

There's a lot of strategies that we have on our platform, and also we have some incentivized vaults. You know that users can deposit their assets and receive you know rewards like. Based upon that. Say, you know, we have partnerships with Lido and we have this wrapped stake ETH vault where pretty much you can deposit and, you know, you're getting the native yield from ETH staking, but also you're getting Lido rewards plus any options fees that you have made if those options were bought with your assets. So that's sort of like 3 sources of yield you might get by depositing assets on DopeX, right?

Okay.

So yeah, that's one example that I can give you, like how some people like play with our platform. Say,

well, but I would assume that you would need to provide liquidity, right? Or like, you know, like this is the same thing as selling options, right? So to be able to sell an option, you have to have like the stock or you have to have the, the thing that the person has the option to buy.

Yeah. Because all of our options are collateralized, you know, with assets. Yeah,

that's right. So for those who are providing collateral for that, right? You need collateral and you need people to provide that collateral, right? That gains yield, correct?

Right. Yeah. We incentivize like our major assets. So, you know, so kind of like to sort of like help with the trade-off of, you know, any risk that writers or depositors might get, you know, because, you know, crypto prices go up and down a lot. So like, yeah, we totally provide those incentives to kind of like, you know, make it a little bit more attractive, pretty much. to liquidity providers to use our platform.

Okay, this is awesome. So, so basically if I'm providing liquidity to DopeX on Arbitrum and in one of these main tokens, right? Like, so ETH or ARB or, you know, whatever is high traffic, right? There could conceivably be a pooled together vault that is like the ETH-DopeX being the yield source pair or whatever that's called. I don't know what the, the, what we're going to actually call that. But yeah, the ETH DOPX vault. So that's possible. And that means that that vault, any, any volume, any locked volume on that vault would be providing liquidity to DOPX on ETH. And then the yield from that would then be converted into pool in the prize pool and given out to anybody on Arbitrum as prizes. So this, this could be done. The only, the issue is that pooled together vaults in the new hyperstructure need to be ERC-4626. Okay. And so you can, you can wrap yield sources. At least I understand that you are able to wrap them in a 4626 wrapper. But anyway, so it's possible. So you're saying there's a chance?

No, right. Like, this is possible. And we're also using that token standard, like, for other, like, new products per se. So yeah, like, you can, in theory, you can build, let's say, a pooled together options vault. I would just, you know, be pretty clear on the risks as always. But yeah, like, pretty much you can gain yield on, on Because, you know, I'm a power user. Like, I'm always the guy that's always providing liquidity on our vaults. And, and yeah, that's just sort of like a way for me to also like generate yield on the side as well with my— to make my assets more productive, per se.

But the risk there, the risk there is just the token price going up and down, right?

Right.

Or like vulnerability, like hacking or something.

Exactly. But let's say sort of like you're always going to be up, let's say, If you buy, let's say, DPX or token DOPX, and you write options for, let's say, a $300 strike price that expires, you know, May 31st, right? I don't know if May has 31 days, but let's say the last day of May, pretty much.

Right, right.

Right. So let's say at that time, at the end of that day, let's say DOPX skyrocketed to, say, $500. Per se, you will lose some of the underlying asset, but you're still going to be up on USD dollar value because you're going to gain premiums from some of those options that let's say, yeah, you might have capped your profits, but you're still in profit, right? Like, it's not you're going to lose if your assets go up. It's just that you cap that profit per se, and you're always going to be up on US dollars.

Well, I guess my issue though is like the— so pooled together is no loss, right? So whatever you did, deposit in to withdraw out one for one. So, it doesn't— so, so ideally you're, I mean, you can't lose the token that you're depositing. So, like, what is it called? Impermanent loss is not, is not good. Like that cannot be a pooled together deposit. So, I think this is what you're saying is like, yes, you're still, you're not, it's no loss, right? In that way. Like if I put in 5 ETH for liquidity, I'm going to be able to remove, like take out 5 ETH. Yeah.

No, I would. You'll still you will. If let's say it's it's there's gonna be some. I don't wanna say loss. It's pretty much you just sold part of that that like pretty much like when you're like writer, you're like you're pretty much saying that hey, I'm gonna sell all these assets at this agreed upon price. So that's sort of like how it works. But but there's strategies that you can use to always kind of like hedge against that. So like and we have other partners that have done it before. And, you know, like, I'm going to give a shout out to JonesDAO, but like, pretty much they have vaults already for this, for products where people pretty much deposit Ethereum or DopeX and they get X amount of yield pretty much per week or per month based on vaults. And, you know, there's different strategies that you can use to kind of like be delta neutral in that sense. So you minimize— I don't want to say it's 100% bulletproof, like you're not going to have impermanent loss on the underlying asset, but It's sort of like, it's sort of like it's a risk that you're doing with options, but we have different products that you can still provide, let's say single-sided, let's say assets and with no impermanent loss pretty much like per se. And I can talk about those like further on in the future, but because they're about to be released pretty much this week and next month. Oh, nice. But yeah, like I actually been, you know, I've been tested in and yeah, like pretty much I've been getting a lot of like good yield on USDC and Arbitrum per se. But yeah, at least with option bonds, There's always like a little bit more risk involved in that sense.

Well, don't let me stop you from giving us that alpha. Please tell us what's, what's up, what's, what's about to be released.

So, yeah, so right now, you know, our options bots, they're pretty like limited in the sense that they're pretty good, like sort of like get started with options in the sense that, you know, you select the strike price and how many assets you want to buy or deposit, right? And but that's not as capital efficient as possible and also kind of like locks your assets for like a week or a month depending on the vault. So at DopeX, we're coming up with 2 new cool products that I think they're one, they're going to bring more fees and volume to our platform. And also 2, it's going to be pretty, you know, pretty good for depositors and option buyers as we're going to have more liquidity, more strike prices. And let's say ways like for people to pretty much be more productive or more capital efficient with their assets, right? So we kind of like launched option scalps last month on a sort of like a beta and a tournament— I want to say tournament competition. I'll say pretty much like stops is as close as possible as let's say using perpetuals, but we pretty much just have scalps up to 1 hour and you can have 110x leverage on it. So if you want to do scalps between Ethereum and Arbitrum, like you can go to dopeX.com right now and use scalps for that. And that's pretty much just lets you leverage up to 100x for those assets. It's a little bit degen, right? But like, it's one of the products that we just launched. And the next one that I'm pretty excited about is called zero-day option spreads. We pretty much let you buy or sell strike options that expire every single day. These are pretty popular on, let's say, Web2 or like regular option stocks. So we're kind of like bringing that to the crypto space. And that should be launching on either pretty much this week. That's going to be launching.

Okay. I love that. I love that. Definitely giving my bestie this podcast in trying to encourage him to come back to crypto. But I have to know, for somebody who's a depositor in a pool together, who plays it safe, who is no loss, prize-focused person, how could they interact? What's your suggestion for how they could use DopeX and try it out and explore in like the least non-degen way possible?

What does that look like? Right now? Yeah. I mean, I will say the most non-degen way I'll say is You know, depending how on your knowledge of options, right? Like, I think that's like the first thing, like, sort of like dive your feet first. I think our option vaults that we have right now live are pretty, you know, they're going to give you sort of like the baby steps on how to like understand options. And I also like this strategy that, you know, 99% safe in the sense that you're not going to lose your assets. It's just depositing on the farthest Out of the money strike price. So let's say usually like our vaults say, let's say Ethereum is at $2,000, right? So for that month, we're going to have strike prices for $2,000, maybe $2,500, maybe $2,900, and maybe like $3,000, right? Like these are like, so you will kind of like deposit on the Farder's ODM. That's called out of the money, right? Strike price. Because if you bet that it's highly likely that Ethereum is going to go up, let's say 30% that week, you will just deposit on that week, gain the yield, gain any option premiums. And, and it's a safe strategy that most of our users also do because it carries the less risk. And I don't think in the history of DopeX what the farthest ODM strike price has ever like lost money. The only way, the only time that that happened was with the Luna crash when we had Luna option puts that pretty much the guy that bought all the Luna options, you know, made all the money in our platform. But, but mostly like far OTM strike prices is the easiest and most safest strategy, I'll say, because it's— I don't think it has ever happened so far on our platform that the asset goes 75% on a week and people lose money on that, 'cause still you're gonna make profits from the option premiums that anyone that had bought those options. So you, you make money with the yield that we provided as incentive and any option premium. And that's one of the strategies that I will say any PoolTogether community member can jump into and, and they're gonna feel confident that their assets are gonna be there when they withdraw.

Comfy is nice. Comfy in crypto is very nice. So how does DopeX grow? So right now you're at $27.38 million TVL, $54 million market cap. How, how, what, what is like the next, like $100 million look like? How do you get there?

Right. So, so I'll say that at least, you know, the whole options space has taken a hit on this bear market. I'll say like most TVL went down drastically, right? We used to, during the bull market, people are more degen and they like to trade more. There's more volatility. So on high volatility time frames, that's when we gather more users and fees and volume and TVL. But I'll say, right, our strategy right now, just kind of like keep building our products that we are betting that are going to get product market fit across crypto, streamlining our UI to make it as normie-friendly as possible and pretty much also keep our partnerships with our market makers going and helping them out to provide liquidity and also arbitrage with our platform so they can also do a lot of volume and trades with us are sort of like ways for us that we're kind of like betting to get more users in TVL. But also like me as a visionary, I guess, What I'm thinking is that whenever we go from that zero to one moment on crypto where people tend to like to do DeFi on their phones more than on desktops, I think we're going to onboard the next 10 million users onto crypto per se. So people, because right now I will say most people use their desktop to do most of their DeFi transactions. Once we have that, I guess, mobile moment, I believe that more people are going to be more comfortable, like trading on their phones and, you know, it's going to be easier to onboard more people as well to platforms.

So right now you're on Arbitrum and you have your own app, but is there expansion to other chains and layers, you know, embedding DopeX or adding DopeX features to wallets, any, any sort of things like that on the horizon?

Right. So right now, I'll say, yeah, like our hub is Arbitrum, right? But we have deployed on other like EVM chains such as AVAX. We have also like launched on Binance Smart Chain. And right now we are actively on Polygon as well, the POS chain. And we are looking forward to launch under zkEVM as well. some products with, with the Matic team. Like we're like pretty much close with the Polygon team as well. So we wanna work also with their DeFi, you know, partners and such. So we can bring options to Polygon per se. So right now our big main focuses are Arbitrum and Polygon per se.

And then what about like other, other apps integrations, that sort of thing? I'm asking because like, this is what I do at PoolTogether is I just go talk to You know, different, anybody that we can partner with and think about, like, how to get the pool together, how to give users of other apps and wallets and such access to pool together so that they don't have to come to our site, you know? So yeah. Any other plans to do that?

Yeah, we have partnerships with different, like, DeFi protocols, let's say, such as JonesDAO and Plutus. We also have products that are built you know, on top of GMX that we might integrate more like tightly with GMX as well on their UI and in our UI as well. And partnerships with apps per se, we right now, DopeX is targeting most of the Asian markets and Middle East markets. So we have partnerships with the wallets that target like those markets in specific per se, like wallet integrations per se, let's say.

Cool. Got it. Got it. Okay. So, you know, are we still in a bear market? Are we in a bull market? What's, what's the future look like according to Casio for crypto?

Nice. So at least I think we're like in a pretty strange time, right? And, but I'm always, I'm always bullish on, on the space, right? Like I'm always bullish that, that this is the place that most people, you know, I don't want to say like our grandmas, grandmas or dads are going to be using DeFi anytime soon, but at least our generation are going to be more comfortable working with DeFi without even knowing that they're doing DeFi. And there's a lot of smart people out there trying to make it scalable and accessible to the world. So in the development side, I'm super bullish. On the market side, and it is what it is, I'll just go day by day. I'm pretty risk-averse. I'm like the boomer guy on my team. While most of the people are degenning, I am like just buying Bitcoin and Ethereum and like maybe like one alt per se and just keep accumulating through the markets and writing options as a, like a DeFi strategy per se. But I think, you know, we're like in a much better place than where we were on last quarter, right, on Q4. Last year, where everyone was just zooming with like, what else can you can go wrong, right? So I think we're like past like the worst that can happen on the crypto like space right now. Like the the only I guess tailwinds that I can headwinds I mean that I can feel about is like the Mt. Gox Bitcoin like selling and any other like regulation that the SEC might come through. But you know, I think like actors such as Coinbase. And are doing like you know are going the right path to like challenge the SEC, so we can definitely have clarity. That also is going to help like help every DeFi like project out there like to know how do I you know go across like regulation and stuff. So overall, I think this year is just going to be a lot of you know uncertainty on like where are we going. But I think overall like the future is bright. Maybe like this year we're just going to be you know. It's going to be a crap market, like, for the rest of the year, who knows? But I'm betting that, you know, more— there's going to be more users on layer 2s. I think we're going to have more, let's say, more activity on CK chains as well. And that are pretty much optimistic rollups are going to mature a little bit more and hopefully, you know, take the training wheels off and become a little bit more decentralized on the path, per se. So at least that's like where I'm betting.

Yeah. Long-term bullish. I love that you're building, you're, you know, responsible. You're, you're the non-degen of the group, Casio. I appreciate that. Holding that, holding it down, being the stability. What's your event strategy look like? 'Cause there's so many events. Oh my gosh. And I got to go to ETH Tokyo, my first hackathon. It was really sweet. It was a really cool experience. I've been to, I went to ETH Denver this year. But then looking at the rest of the calendar and like some events haven't, like they're just being announced now. So I don't know if, if you have an event strategy as far as growing the protocol.

So events, we, we did go to ETH Dubai, like most of the team was there like last month. And per se, at least I cannot talk about the team, but at least myself, I'm gonna be traveling more next year for more Ethereum events. So like, I really want to go to, you know, to ETHCC and all such events as well, any other like Asian-related events in the future. But this year, I'm not like, kind of like, I have some personal stuff that I need to get sorted out first before I can start traveling to all these gaming events. But at least where I live, we have a pretty solid crypto community. A lot of builders and VCs are pretty much a couple of blocks away from where I live. So that's pretty cool. People can just chime in, go to dinner, like talk about pitch ideas, build a project across. So pretty bullish, you know, like that's why I'm pretty bullish because like the people that I meet, like, you know, in real life, they're like really smart and like they're building in the space pretty cool stuff. So, so yeah, I can imagine like how, you know, like the energy, like when it comes to like these big Ethereum events per se.

When you said ETHCC, you don't mean next month, you mean next year or—

Yeah, next year. Because I tried to buy tickets for this year, but I guess I'm pretty late for that. But but yeah, next year hopefully yeah 2024 Casio is gonna be traveling more like for you during events.

Okay, nice. And and and it's not having a booth; it's just actually just attending the events and kind of like schmoozing. It's not necessarily having the booth or oh you'll have a booth?

No, I mean yeah we have done booths like at least for Dubai. Um and I'll say like I'll everything every crypto event that I go you know socially. It's supposed to be dinner, but I end up just pitching to OBCs and market makers our options platform. It's like the arbitrage opportunities that we have. So, so yeah, like I'm always like on sales mode when it comes to DopeX.

Totally. That's, that's— you're good at your job, Cassio. That's great. Cool. Well, hey, listen, I just appreciate you spending time with the PoolTogether community. I know that Richard in the chat is going to go out Try DopeX today. Loves the name. It's dope. That's the second time I've heard that joke today. It was good. And Cassie, any parting thoughts or words that you wanted to promote? Anything coming up or things that we might have missed in this discussion?

Sure. So also, like I mentioned, that we have this brand new product that we just launched called like Option Scalps. So we are running weekly competitions with $5K pool prices for the best traders that, you know, they're the most profitable on the scalps that week. We're going to be running that for, you know, for the unforeseen future. And also, you know, we were part of like the gracious DeFi projects that got a good Arbitrum allocation. So we're going to be launching Arbitrum-focused products pretty soon. Like I will say like next week. So there's going to be a lot of incentivization. If you have some Arbitrum on your, you know, on your wallet and you want to like make it more productive, you can come to our platform and write options with Arbitrum, but also like trade like options for Arbitrum as well. So that's going to be pretty cool.

Very cool. Love those arb rewards. All right. So that's next week. So is the option scalping in, in like on testnet? And so it's, or it's like, it's live. Oh, it's live. Okay. So then it's like a competition with live money. And

yeah, there's a leaderboard, scoreboard. You can see how much you're losing, how much you're making. And yeah, and that's another like, I guess, option strategy. Like if you want to like park your USDC or Ethereum, you can park it on, on, on the, on the Scalps platform and there's no permanent loss per se. You're just making option fees. And, and yeah, like, you know, with some smart contract risk, but I would say the risk is pretty minimized. Like with like high volatility on the market, it's not going to like You know, make you lose your like underlying asset per se.

Okay. All right, Casio, thanks for joining us. This has been awesome.

Thank you, sir. It was a pleasure to be with the PoolTogether community today.

All right. Up only. Here we go. To the moon.

Here we go.

Take care.

Have a good one, sir.

Thanks for listening to the PoolTogether Community Podcast. You can visit pooltogether.com to deposit, and we'd love to hear what you thought about today's episode. So visit the PoolTogether Discord and let us know.