Fusion — Facilitating the Futures and Options of Finance.
One of Fusion’s main goals has always been to decentralize finance, and right now it is exactly this which is the focus, decentralizing traditional finance instruments such as Futures and Options in a way that can currently only be done on the Fusion Blockchain.
Chainge Finance is building the application layer to realize it, but Fusion is what provides the base layer structure on a decentralized public blockchain and what makes it all possible is Fusion Time-Locks (which are also known as Time Slices and Time Frames).
To make it work fully a new token format called FRC758 has been created
(link: https://ff5fcd85-03ae-4f38-8e75-1397c2ad775b.filesusr.com/ugd/0623af_ebedab44dfb2475cb42b8d5dea66ddd7.pdf ).
FRC758 will allow for the combination of Fusion Time-locks and AMM DEX functionalities and the contracts are fully open source and usable by anyone.
Let’s first explore how this can realize decentralization of Futures.
Futures trading is the ability to bid on the future ownership of an asset right now. How could that ability be tokenized? Anyone used to the Fusion blockchain will know that if you slice FSN in two time-slices, you will end up with one short end that lasts from current time until your chosen time, but you will also have an infinity end that lasts from your chosen time until infinity.
This last piece, the infinity-end represents true ownership (but the true ownership only starts at the chosen time).
Effectively this is exactly the same as future, except it exists as a very real and tangible token on a decentralized public blockchain,
instead of legal contract tied to a financial institution.
Chainge Finance will open DEX trading on such futures for specific time frames (convenient dates chosen, for which they open trading).
A first date used will be 2022–01–01, but theoretically trading could happen for any date. Once this happens people can begin speculating on buying or selling their future BTC/USDT/ETH/FSN etc, and if they sell they could still retain their “option” which we explore next.
Options is the ability to buy a small part of an asset with a set deal of acquire the full asset, if eventually desired.
Though this ability is not exactly represented by a time-slice with an end date, Chainge Finance plan to utilize them this way by offering up this
type of deal for FRC758 short-end time slices. Thus, these time slices become Options contracts with an end date.
Perhaps this is best displayed by a practical example. BTC at the date 2022–01–01, do you think it will be valuable or not? Has the bull market ended, and bears took over, or is it just about to hit new all-time highs? It’s hard to know this today, but what if you could buy an option on BTC with a set deal to get full BTC whenever you want until 2022–01–01.
And since Fusions “Futures” and “Options” fit together, you can sell your future BTC (likely not much cheaper than full BTC costs) and retain the “option” to retrieve it at a set deal in case it surges further.
Pretty amazing and only possible on Fusion.