Today, we’re excited open up the first preview of the Hook Odyssey Testnet.
Odyssey is an NFT-focused derivatives DEX, deployed on a custom Arbitrum Orbit Chain. Traders can begin mock trading Milady perps. Support for options and other collections will be added shortly after!
Perpetual Futures (aka Perps)
Perps track the value of a floor NFT from each collection, allowing traders to take positions on the price of NFTs without owning them. Perps never expire, meaning a trader’s position will remain open until they close it or are liquidated. This is possible because of funding rates, where one side of the trade pays the other a small hourly % payment.
Traders can open both long or short perps to benefit from prices moving in either direction.
Perps positions can be opened on Odyssey with up to up to 20x leverage.
Odyssey supports cash-settled put and call options. With cash-settled options, buyers receive the difference between the strike price and the current price of the underlying NFT. For example, an Odyssey trader purchases a 3 ETH Milady call option. On the expiration date, the floor price has risen 4 ETH, so the trader earns the spread of 1 ETH.
Since our initial launch, one of the most common requests was to add put options. With Odyssey’s synthetic instruments, we can deliver capital-efficient put options on NFTs.
Odyssey is the only NFT-focused derivatives protocol combining both options and perps on the same DEX allowing traders to easily hedge their positions in a capital-efficient way. As perps volumes increase, traders will be able to offer more competitive prices on options, making them cheaper for traders. This creates a virtuous cycle of deeper liquidity and better pricing for traders.
Odyssey supports both standard margin and portfolio margin. The portfolio margin system takes offsetting options positions into account, deepening liquidity across the DEX.
Odyssey uses synthetic instruments, which reduces collateral requirements. Improvements in spot NFT liquidity across the top collections over the last year have enabled the creation of reliable oracles.
Each market on Odyssey is isolated from one another. This is done to help traders manage their risk and prevent contagion risk. If one market starts to accrue bad debt from a situation like extreme volatility or a delayed oracle update, other markets aren’t impacted.
Traders have a primary account and then a subaccount for each market. Subaccounts contain their own balance, margin requirements, and positions. Traders will need to transfer testnet WETH from their Primary Account to start opening positions within a market.
Odyssey is built with a powerful off-chain orderbook. The orderbook evaluates incoming orders and determines if they can be matched with other, previously submitted orders. Because all orders are matched, every long position has an equal number of short counterparties and vice versa—the DEX itself is never the counterparty.
By operating off-chain, the orderbook can be much more performant and lower cost than on-chain models. The speed and low interaction cost help Hook deliver more efficient markets and better pricing to users.
Odyssey’s testnet will be incentivized through our Treasure Hunt and trading competitions. Read this blog for more on how the incentives work.
How to get started?
Odyssey’s first testnet is now live!
You can find documentation on the testnet here.
Join our discord if you have any questions!