Introducing Our First Points Perpetual Contract: BGOLD-USDC
We’re releasing our first points perpetual contract, which track the value of one point before TGE. The BGOLD-USDC market allows traders to long or short the value of Blast Gold before the $BLAST token launch.
After Blast Gold becomes redeemable for liquid $BLAST, the index price will revert to the product of the blast token price times the number of $BLAST tokens airdropped per gold.
Why launch these markets?
The last year has seen proven speculative interest in pre-launch markets on DEXes. While these markets are ideal for opening a directional position based on a trader’s sentiment about a given project's prospect, they are not generally suitable for hedging. Points programs as a proxy for airdrop allocations have also been popularized over the last year.
Points farmers have started deploying millions or even tens of millions of dollars to farm a specific quantity of Blast Gold. However, these farmers are at the mercy of the Blast team and overall market conditions to determine how their Blast usage will convert into a financial return. Those farmers can use this perp to value their Gold based on the actual market and hedge locked-gold exposure before the Blast TGE.
How are these markets different from escrow-based markets?
Escrow-based markets like Whales Market and Pump allow users to trade physically-deliverable points futures for many points programs. These futures are collateralized by a fixed amount of ETH when the future is sold, and the seller is not required to continue posting collateral as the market price for these points changes.
Points perps markets are subject to liquidation like conventional perps. These liquidations give points sellers a choice: either post additional collateral to hold the position, or lose their equity in a liquidation. After a liquidation occurs, there is a new counterparty at a new point price.
These points perps markets also give users access to all the trading features on Odyssey, like limit and market orders, easy shorting, notifications, and deposits and withdrawals to many chains.
How does the BGOLD-USDC index price get computed prelaunch?
Before the $BLAST token launch, the BGOLD-USDC perp will not depend on any external spot price oracle. Instead, the price will be self-referential.
The index price instead will be computed as an exponentially weighted moving average (EWMA) of the perp’s mark price.
If there is a strong sentiment that the value of Blast Gold is increasing, there will be more buyers and sellers, and the mark price of the BGLD-USDC perp will increase. When this happens, the mark will rise far above the index, incentivizing traders to short. As time goes on, the index price and mark will converge because the moving average will move closer to the mark, and the funding rate will incentivize traders to bring the mark in line with the current moving average.
How does the BGOLD-USDC index price get computed post-launch?
24 hours after Blast Gold becomes redeemable for liquid $BLAST tokens, a conversion factor between the $BLAST spot price and the BGOLD-USDC index price will be computed based on the minimum number of $BLAST tokens received for each Blast Gold held. If Gold may be staked or otherwise locked to yield more tokens, the conversion price will only take into account the immediate conversion rate (e.g. the conversion factor will equal the lowest liquid rate). Subsequently, the contract will trade with an index price equal to the standard Hook oracle price of the spot $BLAST times the conversion factor.
FAQ
What if Blast Gold is redeemable for $BLAST before $BLAST becomes available for trading?
The conversion from the pre-launch to post-launch index price occurs only when the Gold can be initially redeemed for Blast and Blast is tradeable.
What if Blast is not withdrawable, but is tradeable for USDC or ETH?
If the $BLAST token is not available on major CEXs, but a USDC or ETH/WETH pair is available within a DEX, this price will be used as the BLAST price to compute an index.
If the price feed for this market is not available at launch, trading will be paused in the BGOLD-USD market until the feed can be made available.
What if $BLAST or Blast Gold is locked for vesting for larger Holders?
As long as some users can convert from Blast Gold to $BLAST, the conversion factor between the BLAST price and the BGOLD index price will be locked.
What if the Blast Gold to BLAST redemption ratio changes over time?
Once locked, the redemption ratio will be fixed. Only the initial redemption ratio qualifies.
What if Blast Gold never becomes redeemable?
If Blast Gold doesn’t become redeemable by January 1, 2025 at 0:01 UTC, the contract will settle at $0.01 per Gold.
What if Blast Gold is redeemed for USDC or something else?
If Blast Gold is redeemable for something other than $BLAST token which still has a generally accepted dollar-denominated price, the contract will utilize that price to determine a conversion factor.