As we mentioned before, Liquidity Mining is a way to eliminate bottlenecks in the system, here Opium Team, supporters, and initial community members propose to start a liquidity pre-mining program on Opium Staking. Once the token is live and distributed the actual amount will be decided by the DAO.
Read more about Opium Staking, how it works, and how to earn a yield on the risk you take.
Please bear in mind that you agree to stake risks/rewards (e.g. accept solvency risk of USDT for the corresponding yield). Also, keep in mind that besides several audits, there is no 100% guarantee that there would be no exploits. Opium Staking is in beta, and you are using it at your own risk, never stake money you can not afford to lose.
The pioneering spirit of DeFi traders exposes them to significantly more risk than their fellow traditional traders, not least in the areas of smart contract exploits and stablecoin fraud.
Faced with such irreconcilable risks, even the shrewdest strategy is doomed to failure, transforming the serious act of trading into little more than a casino game. That’s why we developed a tool that comes specifically to the aid of DeFi traders, allowing them to hedge the risks that exist in this pioneering market.
To address this issue and give all DeFi traders a choice to trade in a more safe way, Opium is offering the DeFi community an insurance interface in a form you are very familiar with.
What you can do with Opium Insurance:
- Opium Insurance is tradable: you can buy it or sell it as the need arises.
- You can choose from different types of insurance: from insurance against smart-contract hacking to insurance against stablecoin default.
- You can decide to take some risks — stake money into the pools and earn extra returns.
To buy insurance, there should be sufficient liquidity to cover potential losses. This is where staking comes in. Staking is basically putting your money into the risk pools to get rewards. Returns will depend on risks you are willing to accept and can be very modest or super boosted, you decide!
Liquidity providers stake their funds into the pool and receive Liquidity Provider (LP) tokens, representing their pool share. LP tokens can be bought or sold on the 2ry market (e.g., Uniswap, 1inch).
Insurance Liquidity Providers put their capital against the insured event and earn a premium from users who want to be protected.
Opium Insurance has so-called epochs. Each epoch represents insurance with an expiration date. Thus, at the end of each epoch, all insurance contracts bought as part of that epoch expire; the pool updates the expiration of the new epoch and starts to sell insurance contracts with new parameters.
Each epoch consists of Staking and Trading periods. The staking period starts at the beginning of the epoch and lasts 3 days. During this period, liquidity providers can stake or unstake their funds. There will be a 27 days period where stakers won’t be able to unstake their funds.
Funds staked by liquidity providers are used to settle insurance contracts. When users buy insurance contracts, they pay a specific premium to the pool whereas the pool locks the margin in the Opium Protocol to protect buyers’ insurance if the insured event occurs. Premiums received by the pool are held in the pool and can be reused as margin to issue additional insurance contracts and should be considered as pool income earned from selling the contracts.
By having to lock the margin in order to create derivative contracts, the pool exposes itself to the risk that insurance will be triggered and have to be paid.
The outcome of an insurance event depends on the type of insurance. For example, in the case of stablecoins, a USDT/USDC-specific oracle contract calculates the difference between the market price of USDC and USDT at the contract expiration, and if it falls below a specific threshold — 5%, for example — then the insurance event occurs, and the insured parties are compensated to the value of the price difference between the two assets.
First, you need to go to opium.finance and enter the app. In the app, you will be automatically redirected to the staking page. There will be different pools where you can stake your liquidity. The active one will be with a bright blue button and there will be a green word “Active” and also the duration of the staking phase (how long time you have to stake/unstake your tokens).
It is crucial to remember that you can unstake your tokens only when the staking phase is ACTIVE. If the staking phase ended, you will be able to unstake your tokens only in the next staking phase.
So to stake your token, you need first to connect the wallet.
After connecting the wallet, you can choose where you want to stake, if the staking is active you can press the button and go to the staking widget.
In the widget, you need to choose ‘STAKING’ and enter the amount you are willing to stake. Please be careful and don’t stake all your money, read the description first, and make your own analysis.
In the widget below, you can see on which conditions your stake will be used as compensation for the users who bought insurance. To proceed, click on the “STAKE” button.
First, you will be asked to enable your USDC tokens. To enable tokens press the “Enable” button, sign the transaction in your wallet and wait for the confirmation.
When the enable is confirmed, you can stake your tokens into the staking pool. Press “CONFIRM”, sign the transaction in your wallet and wait for the confirmation.
You staked successfully! Now you can check your LP tokens on the “Positions” page.
Here will be shown all positions you have on Opium Finance. What you can do with your staking positions, you can trade them on the secondary market (Uniswap). Just press “trade” and see if there is an established secondary market or you can create one yourself.
It is crucial to remember that you can unstake your tokens only when the staking phase is active. If the staking phase ended, you will be able to unstake your tokens only in the next staking phase.
So to unstake your tokens, you need to go to the “STAKING” page and click “STAKE/UNSTAKE” in the pool where you staked your tokens.
In the staking, widget click “UNSTAKE” and enter the number of tokens you want to unstake. Then click the “UNSTAKE” button.
Then you need to confirm the unstaking of tokens. Press “CONFIRM”, sign the transaction in your wallet and wait for the confirmation.
Your tokens are successfully unstaked, they should appear now in your wallet.