The problem Newton solves
- Newton is a decentralized trading platform where people can trade call and put options. By means of leveraging the price feed from Tellor's decentralized oracles and a clean and simple UI, Newton allows for a fast and secure way of trading options.
- Several trading platforms dealing with decentralized derivatives tend to add a certain degree of centralization either by having a centralized entity managing the funds, or by involving fiat currency during final settlement. Newton tends to keep the approach as decentralized as possible by providing the option of settlement in ETH & DAI.
- Traders do not have to abide by pre-decided lot sizes, instead they have the freedom to chose the amount of ETH underlying an option and also specify their premium.
- Newton has an inbuilt escrow mechanism which guarantees the premium to the seller, and it also handles a seller's margin to ensure profits to the buyer.
- There is also the flexibility of selecting the settlement type between ETH (wherein the specified quantity of Ether is transferred from one party to another during final settlement), and DAI (wherein the overall profit, if any, is calculated using price feed from Tellor oracles, and an equivalent amount of DAI is transferred to the buyer).
Challenges I ran into
Writing the smart contracts handling the options was the most challenging part. The safety mechanism and the overall model of cash flow were needed to be meticulously designed, considering several situations.