Hegic 2022 options review and opinion

Hegic Protocol is a Decentralized Finance platform based on Ethereum and specialized in financial options trading, a novelty on this market.

This means that it is a Non-Custody type platform where users can mainly trade options with Ethereum.

As we can see, we already have a “challenge broker” that goes beyond the typical cryptocurrency exchange or even lending markets. I think others will come who will adopt this type of product.

Is Hegic safe?

We are in a very new market and it is early to know how secure a platform like this is.

By belonging to the DeFi ecosystem, it has a series of advantages that make us consider this service quite safe.

First of all, the cryptocurrencies are in your custody, in this case under the wallet you used to connect the service. In other words, your money is always in your possession. You just need to make sure your passwords aren't stolen and that you keep them safe.

For this reason, these types of exchanges are assumed to be safer than centralized ones, such as Binance or Coinbase.

Is Hegic regulated?

No, Hegic is not a regulated broker. These types of companies decentralized financing are not.

How to register with Hegic?

To join this DEX, there is no need to go through a typical registration process that one would expect in a traditional broker or exchange.

As it is unregulated, it does not require us to identify ourselves, but what really means that we do not have to prove our identity is the fact that our cryptocurrencies or funds are in our possession.

The only thing we need to do here is to connect the wallet we are using. The wallets accepted by Hegic are:

• Dappradar
• Wallet Connect
• Authentic
• Burner connection
• MEW Wallet

How does Hegic work?

This options exchange is designed to be able to trade this type of contract, but it also has other services such as Staking.

Let's see how we can use this platform for trading ETH or WBTC options.

How to buy or sell options with Hegic?

Hegic is a decentralized options platform that gives the possibility to buy and sell them, so we are available for:

• Buy calls and puts
• Sell ​​(write) calls and puts

If we don't know how options work, I recommend that you consult a manual about them, because it's not an easy asset, or at least don't think you're going to win easily. On the contrary, options are quite complex instruments and are only recommended for professional or very experienced traders.

Options trading on this platform is quite simple. At least in its most basic format, which is buying calls and puts. The sale of options requires mathematical knowledge to be able to carry it out with a minimum of seriousness.

Most of the options are referenced on Ethereum, and we can trade lots with a minimum value of 1 ETH. For this, we choose a “strike” or “exercise” price and set it on a certain date, which at Hegic can be:

• 1 day
• 1 week
• 2 weeks
• 3 weeks
• 4 weeks

By attempting to carry out the operation, Hegic directly calculates its cost.

For example, if we buy an ETH option worth $2 and set an expiry of 763 weeks, we receive a cost of $2 for the option.

What does it mean?

That we will make money if the price exceeds $2 (957 + 2).

For this, we only deposit the value of the option, which is $194, so we can see that with a fairly small capital, we can manage a much larger capital. This is called the use of margin or leverage. In this case, we would be facing a leverage of around 14:1.

The good thing about trading this type of options?

That the profit potential is unlimited because if Ethereum rises to $10 in the next two weeks, we can make all the money that exceeds the strike price + the cost of the option.

However, if the price does not exceed this “minimum profit” price, the option will be worthless and we will have lost the $194.

Of course, we weren't going to have a risk-free operation.

Who takes the opposite view of these operations?

It's not Hegic, but those who write or sell these options.

But why would anyone want to write these kind of contracts where they can lose everything?

Well, because they are professional traders who act as market makers and make their options with very complex mathematical calculations, and generally seek to hedge their trades by selling various options.

However, no one can guarantee that they will not go bankrupt if one day the price of cryptocurrency moves too aggressively.

From experience I tell you that those who sell options earn more in the long term than those who buy them, since the latter tend to lose most of the time and are mostly traders who trade too much. This is a common phenomenon of this type of assets in other markets such as stocks, indices or commodities.

Therefore, the sale of options can become a professional activity if it is sufficiently studied, but it is not without risk.

Who might be interested in Hegic's options?

• Short-term traders who are looking for quick profits (be careful because they can lose so quickly)
• Holders, who want to protect the value of their EHT or BTC portfolio in the short term by buying a put (be careful because it's like buying insurance, they are not free)
• Miners, who want to ensure a minimum price of Bitcoin or Ethereum in the future, when they have mined, and to do this they sell calls or buy put options (in case the price goes down).

Staking with Hegic

This platform also offers staking services but for this you must buy your own token called HEGIC.

This HEGIC token has a maximum supply of just over 3 billion, so they guarantee us that they will not be able to create more, with the danger of devaluation that entails.

So if we want stake out this DEX, we need to buy 888 HEGIC. This entitles you to own a lot in the Staking Wallet.

Once we have this investment in Staking, we can start earning the commissions generated by the Hegic protocol.

The minimum time for one of these batches to be “blocked” is one day. In other words, once we put money into the staking program, we can't take it out until the next day.

Win prizes at Hegic

This platform has a schedule to distribute up to 1 HEGIC. Said schedule will be staggered until October 2023. On their page they said schedule with the HEGICs that will be distributed according to the possibilities of obtaining them, which are as follows:

• As Pools Liquidity Providers: Here prices will be proportional to the amount in each pool.
• For option holders: to reward people who invest in the platform. The prize will be proportional to the time and amount of said operations.
• Staking lots.

Hegic Final Reviews

Well, it's a platform that has quite a bit of potential, even though it's still in its infancy. He was just born at the end of 2020.

The good thing about it is that its core product, Options, is fairly new to DeFi.

We will have to see if it has success with traders in this type of market.

Granted, the high leverage will appeal to many thrill seekers, but it's not something we particularly recommend, as such a trading tool is often misused by most users, who end up doing bankruptcy very quickly.

An even more interesting use can be to become a liquidity issuer, that is, to study how options are sold professionally, since this is an activity that has always been present among traders and brokers on the traditional financial markets. Now, in these DeFi markets, there are new opportunities for new generations to become those dealers without those barriers to entry that were on Wall Street.

More information on website.