KuCoin AMA With ClearDAO (CLH) — Decentralized Derivatives Factory Open for Everyone
Dear KuCoin Users,
Time: January 5, 2022, 09:00-10:00 (UTC)
ClearDAO is tackling the DeFi derivatives space by building the infrastructure for customizable derivatives. The Clear SDK provides templates and tools that enable developers and traders to easily create options, notes, futures, and swaps and launch marketplaces to facilitate the trading of these products. They are building a multi-chain ecosystem where member exchanges offer unique derivative products, all powered by ClearDAO.
Official Website: https://cleardao.com
Lite Paper: https://cleardao.com/docs/Clear%20Litepaper.pdf
Alpha — Core Contributor of ClearDAO
Alpha is a core contributor of ClearDAO. Joined crypto in 2018. Previously worked on Wall Street and technology startups in Silicon Valley.
Q&A from KuCoin
Q: Please introduce yourself and the team behind ClearDAO.
Alpha: My name is Alpha. I am a core contributor of ClearDAO.
We are a team of 20 full-time members with professional backgrounds in traditional finance, specifically flow and structured derivatives sales and trading, blockchain technology and traditional media.
Many members of our team are seasoned participants in the crypto industry, with experience in early-stage investments, helping projects on marketing and community, and being directly involved in the building of technology infrastructure.
We are thankful to be chosen by KuCoin Spotlight. I am sure that KuCoin users and community members will benefit greatly from CLH listing and promotions.
Q: What is ClearDAO and what’s the vision of your team?
Alpha: If anyone is still unfamiliar with ClearDAO, please spend more time on KuCoin Spotlight announcements.
ClearDAO is tackling the DeFi derivatives space, which as of now hasn't really taken off. But we expect DeFi to repeat what traditional finance has gone through, and eventually, the derivatives market size will be much larger than the spot market.
Based on our observation, there are currently 2 main problems that are preventing DeFi derivatives from getting traction.
The first problem is that most DeFi derivatives projects today are putting too much focus on their own platforms. These platforms offer exchange-traded (standard) derivatives, which in our opinion, are not what the users want.
What makes derivatives attractive to users is the bespoke aspect, which tailors to the needs of the buyers. This is quite obvious in traditional finance, where OTC derivatives market size is way larger than exchange-traded derivatives.
We are taking an entirely different approach to DeFi derivatives. Instead of exchange-traded products, we are offering bespoke products. Instead of focusing on building one exchange, we are focusing on building the infrastructure that allows for multiple exchanges to build on top of it.
ClearDAO is building a DeFi derivatives SDK that enables developers to easily create bespoke derivatives and launch exchanges.
Developers from all over the world should know what derivative products are popular in their regions. They can use the Clear SDK to quickly build these derivatives and launch their own exchanges.
By using the solution provided by ClearDAO, we can also introduce our ecosystem market makers and liquidity providers to our ecosystem exchanges. This can solve a major obstacle with new exchange platforms that is the initial liquidity.
We have a multi-chain strategy in place since the inception of the project.
We will be on Binance Smart Chain, Arbitrum, Solana and Ethereum. Then we will evaluate the next batch of blockchain ecosystems to support.
Our vision is to build a future where all DeFi derivatives are created, traded, cleared and settled on a network of blockchains powered by ClearDAO.
Q: Tell us about the Clear SDK.
Alpha: The Clear SDK is our flagship product.
It has 3 main components:
1. Derivative workshop.
This is where developers can create bespoke derivatives with a lego-style mix and match approach.
Start by choosing the underlying asset, it can be a single fungible token (such as BTC), or a basket of tokens (such as 70% BNB + 30% ETH), or even an NFT collection (such as the CryptoPunks collection). Then choose the derivative that you want to create.
We are starting with barrier options and structured notes. Soon we will add support for perpetual futures and CDS (coin default swap). Then we will explore adding more option types (vanilla, binary and more) and other derivatives such as TRS (token return swap).
Note that for each derivative product, there are multiple parameters that can be adjusted. For example, in our barrier option template, developers can specify whether the option is call or put, strike price, maturity, barrier levels, and whether it is knock-in or knock-out.
Our goal is to cover as many derivative types as possible, so eventually, if you can dream up a derivative contract, the Clear SDK can build it out. Then theoretically, if you want to build a DeFi derivative project, there is no reason not to use the Clear SDK.
2. Open marketplace.
This component contains the open-source code for white label exchanges.
We have already coded an automated trading platform, as this format is more familiar with DeFi users.
Going forward, if there is enough demand for an order book-style trading platform, we can explore coding that out as well.
3. Risk Management Tools.
We want to offer quantitative risk exposures to our users, so they can better manage portfolio risks and perform macro hedges.
When trading in the spot market, usually knowing the current prices and the total value is enough for most users. But this is not the case in derivative trading, especially for the purpose of hedging risks.
If you are trading options, you will want to know the greek risks, and if you are trading fixed income derivatives, you will want to know the duration and convexity risks.
Our goal for the longer term is to offer these quantitative risks to our users and even metrics like VaR (value at risk) so our users can make informed decisions and not put on a trade and hope for the best.
Q: What are the new technologies developed by ClearDAO?
Alpha: Most crypto projects are open source.
It is easy to copy and paste, put on a new name or deploy on a different blockchain, and you are good to go. But ClearDAO is not a copy and paste project. We have been developing for close to a year now.
To give you an example of our original tech, we all know that NFT is the next frontier, and it goes well with the metaverse narrative. Naturally, many dev teams are looking to offer NFT derivatives. We spent a lot of time on NFT derivatives.
In DeFi, you need to use oracles like Chainlink for data feeds. It’s not hard to build derivatives on BTC, as we can use Chainlink for BTC price feeds.
But for NFT derivatives, none of the oracles currently offer NTF price feeds and NFT prices are easily manipulated. So our approach to NFT derivatives is to offer derivatives on the entire NFT collection, not on a single NFT.
Since Chainlink does not yet offer NFT collection prices, we are building it from scratch. We grabbed all the historical traded prices from the OpenSea smart contract and other contracts to construct the NFT collection index price. We use all the historical traded prices (not just the latest price) to make it less manipulate-able, and this is all coded and done.
When the Clear SDK is available for the public in the coming months, anyone can build CryptoPunks collection derivatives. There are tons of NFT collections coming out, and most of them, the price trends down to zero.
You want to own the best NFTs, and CryptoPunks is the best of the best, but the problem is that one punk is just too expensive. We will be offering CryptoPunks derivatives. You can buy these and have exposure to CryptoPunks, so if CryptoPunks price goes up, you will make profit because you have CryptoPunks derivatives.
This is just one of the many examples of our new tech.
Q: Can you tell us about your go-to-market strategy?
Alpha: Our flagship product is the Clear SDK that enables developers to quickly design derivatives and launch trading marketplaces.
Our main business model is B2B2C. But at the same time, there are too many crypto projects coming out every week.
We know that just making the SDK available isn't going to attract developers. So we will be launching the very first exchange built using the Clear SDK.
This exchange serves 2 purposes.
The first purpose is to provide actual derivative trading to our users. They can purchase derivatives to enhance potential returns or to hedge risks. Through actual user activities, we can collect feedback to improve our SDK further.
The second purpose is to showcase what the Clear SDK can do. We believe having a live exchange can better attract developers to actually give our SDK a try. Once our SDK and exchange are live, we will be working with ecosystem developers to help them through building out their derivative marketplaces.
We are actually in discussion with a Korean team. So it is very likely that you will see a Korean derivative marketplace coming out in 2022 that's powered by ClearDAO.
Our SDK will be made available to the public, so anyone can take it and build projects with it.
We will also work with select developer communities and teams to launch derivative marketplaces that are up to our quality standards.
Q: How can developers benefit from using the infrastructure built by ClearDAO?
Alpha: The benefits are massive.
Coding out a derivative exchange from scratch and doing it well takes a team of experienced developers.
With the Clear SDK, we are enabling developers with 2 years of professional experience to easily launch derivatives exchanges. So this not only lowers the experience required, it also reduces the development time.
As mentioned earlier, a common hurdle for new exchanges is the initial liquidity. An exchange without liquidity is not able to attract users, and an exchange without users is not able to attract liquidity providers. This is a tough problem to solve.
ClearDAO has forged strategic partnerships with world-class market makers and liquidity providers. Kronos Research, Redline DAO, VRM are all our ecosystem partners. There are more top-tier confirmed partners that we will unveil in the near future. Our partners are committed to inject initial liquidity to our ecosystem exchanges. This effectively alleviates a major headache for our ecosystem developers.
With much of the coding and initial liquidity out of the way, developers can spend more time on marketing and community building. ClearDAO will also provide marketing support for our ecosystem projects, so they will be starting community and marketing with an initial base.
We make building DeFi derivative platforms super easy. If a team has a good idea, with entry to mid level coding experience, they can make it happen with the Clear SDK.
As mentioned earlier, we identified 2 problems preventing DeFi derivatives from going mainstream. The first problem can be solved by incorporating customization into derivatives, which is exactly what the Clear SDK is for. The second problem has to do with the participants in DeFi.
They are not like the professional, sophisticated investors on Wall Street who know derivatives inside out. Derivatives are unfamiliar to most DeFi participants, who really either don't have time or don't bother to learn about derivatives. So to get these people interested in derivatives, it is very likely that extra incentives are needed. This could be accomplished by adding elements of farming, NFT, or gaming into derivatives to make the overall product package attractive or user experience fun.
Our ecosystem developers will be spending less time coding derivative products and exchange functionality. This means they will have more time to think about the creative ways to incorporate derivatives with other elements to make DeFi derivatives desirable.
Q: Is the project open source? What’s your plan to stay competitive?
Alpha: We are an open-source project, just like any amazing project in crypto. Anyone can copy and paste our code, but our strength is with the community and our ecosystem will just keep growing. Our ecosystem projects will have to announce that they are powered by ClearDAO, just like projects using Chainlink have to announce they are using Chainlink.
When people start to realize ClearDAO is going to be successful, when they begin to fork our code, at that time, we would already have several ecosystem exchanges. We’ll have the strongest community that’s running the same code and other dev teams forking our code just shows that our code is badass. It’s like DEXs forking Uniswap code and rebase projects forking Olympus code. Really, it just makes the original code so much stronger.
Plus, we are not focusing on one exchange or one platform, we are building an entire ecosystem that is open to everyone. Once we have our brand recognized worldwide, it doesn’t really make sense to fork our code and be one step behind.
Uniswap and Olympus are doing their own platform, they are not building an ecosystem, so it can make sense to fork their code and launch a copy. But ClearDAO is already welcoming anyone to use our SDK and use our code to build things. I don’t see people will want to fork our code. They will analyze our project and eventually decide to join us.
Q: Please introduce the governance aspect of the ClearDAO ecosystem.
Alpha: CLH is our project token, it is mainly used for governance. Our governance system is expected to be online in 2022, where DAO members can create proposals to be voted on by all token holders.
The Clear SDK is the flagship product of our project. Once we have developed everything laid out on our roadmap, our token holders can decide how to further improve the SDK. This can be support for a specific derivative product, new exchange functionality, or deployment for new blockchain ecosystems.
In addition to steering the development progress of the Clear SDK, token holders can also vote to adjust the parameters on the marketplace that is managed by us. This can include changing the trading fees and improvement on the UI and more.
Besides using the token for governance purposes, the token can also be staked for yields.
We are also looking to add more utilities to the tokens in the future. The ecosystem marketplaces launched by 3rd party developers with our support, their exchanges should incorporate use cases for the CLH token. So as our ecosystem matures, CLH will have more utilities and thus more value.
Free-Ask from KuCoin Community
Q: I want to support your project. Tell us more about the ambassador program and in what ways can we participate?
Alpha: We are still planning our ambassador program, this will be live at a later date.
Once our ambassador program is live, CLH will moon, so diamond hand CLH tokens. WAGMI!
Q: Too many projects promise magic but never release any working product or prove any revenue within a short/long time of release. Is your project also like this? If not, can you tell us what makes your project different from other projects?
Alpha: Yes, this is a common problem with crypto projects.
But I assure you our products are ready to launch very soon.
Our marketplace platform is already on BSC and Arbitrum testnet. You can visit here: http://demo.cleardao.com
Q: Why did you choose Binance Smart Chain? We see some chains pop up with good scalability too, so why do you choose BSC?
Alpha: BSC is an active smart contract platform. We want to support all the promising blockchains. It’s natural to include BSC. In addition, we are also targeting Ethereum, Arbitrum, Solana and many more.
Q: Since NFT is popular nowadays, is there a plan for NFT integration?
Alpha: As mentioned in the first half of the AMA session, we’ll offer derivatives on NFT collections, and this is a unique selling point of the ClearDAO project.
Q: Do you guys feel satisfied by seeing your progress and achievements till now when you look back to the day when you started this project?
Alpha: The response we receive from the market has shattered all our expectations.
We never imagined we would be on KuCoin Spotlight. Things are going extremely well in terms of product development and community expansion. In addition to our English community, we also have Korean, Vietnamese, and Turkish communities.
Lots of people are looking to get their hands on CLH.
You are here today, so you are all early. Make sure you load up on CLH while it’s cheap, or have fun staying poor.
Q: What are the benefits of holding your token as a long-term investment? Can you tell us about the motivation and benefits for investors to keep your token in the long run?
Alpha: We are building an ecosystem of exchanges. Every exchange powered by ClearDAO will need to create a utility for CLH tokens. As we build out our ecosystem, CLH will have more and more use cases.
In our opinion, the CLH token will be an extremely useful token in a year’s time as we become the market leader of DeFi derivative exchanges.
Q: Do you have a token burning plan to increase token value and attract investors to invest?
Alpha: Of course. Token burn is planned.
Token burn will be surprise events and not pre-disclosed events. This will ensure CLH token price will react most favorably, when no one expects the burn and it happens, you know what the token price will do.
Q: How can users stay up to date with this project? Are there channels, including local communities, where users can get the latest updates?
Alpha: Please join our main Telegram chat to stay up to date: https://t.me/cleardao
Q: Can you briefly describe your partnership so far and upcoming partnerships?
Alpha: We have partnered with most of the tier-1 market makers. It's only a matter of time before we onboard most of the top-tier market makers and exchange-related service providers.
Some of the partnership announcements have not been made yet, so we are saving these ammo for later if you know what this means.
Q: Have you been audited? I have not heard you talk about that. Security of funds is what every investor craves for and plans to escape in case of insecurity of funds, scams and rug pulls. How strongly built is your security put in place?
Alpha: Our smart contract is audited by CertiK.
Q: I am interested in investing in your project. When and where can I buy your tokens? Is it already listed on exchanges?
Alpha: We are not doing private sales these days. Get CLH on KuCoin, where else?
Q: Is there anything else you would like to share or you want us to know?
Alpha: Thank you all for your questions. Sorry that I cannot respond to all of you. If you would like your questions answered, please join our Telegram. Our moderators will be able to assist you.
Please join our social media to stay up to date on ClearDAO.
This is the best first opportunity of 2022, and keep your eyes on all future KuCoin Spotlight projects! Buy CLH on KuCoin to make sure you have the legit token. KuCoin lists the best projects. I am excited for the next KuCoin Spotlight!
KuCoin and ClearDAO have prepared a total of 2,000 USDT to give away to AMA participants.
1. Free-ask section: 75 USDT
2. AMA activity: 1,925 USDT
Activity 1 — Quiz: 1,500 USDT
Activity 2 — Price Guess: 300 USDT
Participation Rewards: 125 USDT
. . .
If you haven’t got a KuCoin account yet, you can sign up here!