Introduction to Premia Blue
💡Welcome to an overview of everything you can do on Premia Blue!
Premia Blue is a decentralized platform for trading DeFi options and earning yield.
From casual traders to institutional capital, the product lineup of Premia Blue caters to everyone. Here's a list of the main features users can access in a permissionless manner:
- Concentrated liquidity
- Crypto options trading
- Aggregated orderbook
- Permissionless pool creation
- Strategy vaults
Starting with Concentrated Liquidity and Range Orders, let's do a brief overview of everything that Premia Blue has to offer.
Concentrated Liquidity & Range Orders
Concentrated liquidity and range orders are the core of Premia Blue for liquidity providers.
Concentrated liquidity is a feature that allows liquidity providers (LPs) to set a specific range of premiums they want to provide liquidity for rather than providing liquidity for the entire spectrum of premiums.
The current average premium paid will be displayed on the interface with a little blue bar, and LPs can select the range of premiums they are willing to underwrite options for.
For example: I can say I want to sell ETH Calls for the July 5th expiration date with a strike of $1600 only if the premiums for those options are between $200 and $500. My liquidity won’t be used to underwrite any options where the premium is below $200.
This allows users to manage their risk and determine what premium is worth it for them to sell options that are more likely to expire in the money.
Premia Blue: Liquidity providers are able to concentrate their liquidity within the range that will earn them optimal yield.
Aggregated Option Buying
Users on Premia Blue will receive price quotes from multiple different sources.
When buying an option, you first select which asset you want to buy — let’s say you want to buy a Call option for WBTC.
So you select WBTC, your strike price, and your expiration date and Premia will show you a list of quotes from all the different WBTC pools.
Maybe you can get a better rate in the WBTC/USDC pool than from the WBTC/DAI pool, or maybe one oracle is providing better pricing than another oracle. No matter what the case is, Premia Blue will display a list of quotes from different chains and different LP ranges so that you can select the best price execution available.
Option buyers will always know they are getting the best price possible, while LPs get more capital efficiency from their liquidity being used to underwrite their desired ranges.
Premia Blue: Option traders will always receive the price quotes for optimal trade execution.
The Orderbook View is a more comprehensive way of visualizing the same options you’d be displayed above.
Instead of having to select your strike price and expiration, you can just select your asset, and in one simple table view you’re able to see strike prices and click through various expiration dates.
Permissionless Option Pool Creation
Premia Blue grants users control over which assets are available to be traded on the platform.
Permissionless option pools allows users to add their favorite tokens to Premia Blue and begin underwriting options for them, assuming they have enough liquidity to seed the pool.
Users are also able to deploy new pools for strike prices and/or expirations that don't yet have available liquidity.
As with all Premia pools, the LP can begin earning premiums and trading fees as traders utilize the pool.
Strategy Vaults are simpler, easier ways to earn from providing liquidity on Premia Blue.
Permissionless pool creation and underwriting and selling specific options is often more valuable for advanced users and people who want to actively manage their LP positions. On the other hand, Strategy Vaults are for users that want to put their liquidity to use on the platform without having to worry about the intricacies and management of concentrated liquidity positions.
Vaults will provide different strategies, such as Bullish sentiment or Bearish sentiment, allowing users to pick a vault that aligns with their market outlook and sit back and let their capital be used to underwrite options and earn premiums.
Let's recap the key features of Premia Blue:
Aggregated Price Quotes: Traders will receive price quotes from multiple sources, ensuring optimal trade execution.
Orderbook View: Users can switch between views to make more informed decisions. Orderbook View displays things like breakeven price and liquidity across expirations simultaneously.
Permissionless Pools: LPs can permissionlessly deploy pools for the assets, expiration dates, and strike prices of their choosing.
Strategy Vaults: LPs can choose to deposit into simpler self-executing strategies as opposed to entering granular concentrated liquidity positions.