Delta For Dummies
Sometimes a DeFi project comes along so genius, so complex, so innovative, that it can leave you scratching your head trying to figure it all out. Delta Financial is one such project, and in this article I will attempt to to take a dive into everything I think you need to know about Delta. Hopefully you will come out at the end of it with a clearer understanding and a deep appreciation for what has been, and what will be, built.
To truly understand Delta, I feel it would be best to split it up into sections to make it easier to digest, so if you feel you have a firm understanding on one section already, feel free to skip ahead to the next. The sections I’m covering in this article are;
Delta Financial — what problems does it seek to solve, who is behind it?
The DELTA Token — what it does, how it works, why is it needed?
The Delta rLP Token — what is a rLP, what are the benefits of rLP?
Staking and Farming — rewards, rLP staking, DELTA token staking.
How to get involved — Limited staking window, referral scheme.
What is Delta Financial?
Delta Financial is a decentralised options trading protocol, and the first announced product of CoreDEX. Options trading in traditional finance is a multi billion dollar industry, yet even with the recent surge of DeFi products, we are yet to see any DeFi options trading products really capturing much of the traditional market share. This can partly be attributed to these protocols having low liquidity and/or non guaranteed liquidity, meaning traditional finance options are much cheaper and more competitive.
Delta financial is aiming to bridge the gap between decentralised and traditional finance, by being the first protocol of its kind to secure permanently locked liquidity as well as open vested liquidity. Doing so would provide users with a lot cheaper premiums for their options than anything else in the space, and bring it to a level where it can compete with the centralised big boys.
The Team
This is all brought to you by the same team who brought you CORE, and is in fact deeply intertwined with CORE. Due to the nature of what is being built, the devs prefer to remain behind pseudonyms, but that doesn't mean there is not things we can learn about them. They bring to Delta a deep understanding of financial principals, having traded derivatives themselves for many years on Wall St, with their knowledge clear to see in the more technical Medium posts that they have released. Through their interactions in Telegram and Discord, you can tell this is a product they are deeply passionate about. The care they are taking with Delta really goes above and beyond what people are used to seeing in DeFi. Not only are all contracts audited by Arcadia Group, they have actually paid them to work in house, reviewing the code line by line as it was written. Arcadia CEO Rasikh Morani even pops up in the Telegram from time to time, and always has good things to say about the team!
The $DELTA Token
To investors the DELTA token is a token to mainly be used for staking and earning yield. It is a somewhat unique token, as it comes with roughly a 2 week vesting period. (I say roughly because the actual vesting timeline works from blocks produced by the Ethereum network, but this equates to roughly 2 weeks, so I am using that timeline for simplicity) That is to say every time DELTA is transferred the 2 week vesting period begins, meaning you only have access to 10% of the true value of the token at first, gradually going up to 100% at the end of the 2 weeks. As this is all coded inside the DELTA token itself, no further gas fees are required during the vesting process. If DELTA is transferred before the 2 week vesting period has completed, the unvested portion of the token goes to Deltas Deep Farming Vault (DFV). There it is distributed amongst stakers in the CoreDEX system, with a portion being permanently locked and removed from the supply. For more detailed percentage splits I recommend you read through the articles listed under ‘Further Reading’ at the end of this article.
The unvested DELTA provides liquidity to the protocol, which then uses this liquidity to provide options with a 1 week expiry date. This creates a more flexible option for people looking to provide liquidity and earn fees from CoreDEX without the need to permanently lock it.
There is originally 45,000,000 DELTA tokens created, with no possibility of new DELTA being minted. A unique mechanism permanently locks DELTA with each vesting schedule interuption, creating a hyper deflationary token. The DELTA token can also be utilised for bonuses and compounding when staking, and we will take a closer look at this later on.
Delta rLP Token
Delta rLP Token is issued to represent your share of the permanently locked liquidity within Delta. You may have heard of LP tokens before, such as the ones you receive for providing liquidity to a pool on Uniswap. What separates rLP tokens from regular LP tokens, is a rebasing mechanism built into it.
Rebasing is a way to drive up the price to mint new LP tokens, making it increasingly harder for more people to obtain. How much harder you ask? Well, after the first rLPs are minted, they are immediately rebased to 150% of their original price, going up a further 10% daily, forever. It wont be long until the new mint price of these rLPs will be in the billions of dollars! This benefits holders of rLP tremendously and particularly rewards early contributors, making it harder for their shares of this protocol to be diluted.
These tokens will be able to be traded as easy as any other token.
Delta rLP tokens are not subject to any of the vesting periods that DELTA is, and can, of course, also be staked to earn rewards — which takes us nicely into the next section…
Staking and Farming
Rewards
As already mentioned, both DELTA and rLP tokens are able to be staked and will receive rewards for as long as they remain staked.
These rewards will come initially from any interrupted vesting schedules, and later will also receive a portion of the fees paid by users of the Delta options platform. Rewards are split, with 80% being distributed in DELTA, and 20% being distributed in ETH. The ETH rewards are claimable at any time, and upon claiming will go straight to your wallet. DELTA rewards though, are subject to a 12 month vesting period. Claiming these DELTA rewards is a 2 step process.
Step 1: Initiating the claim contract. This will transfer your rewards into the withdrawal contract, where they mature over a 12 month period.
Step 2: Finalising the claim. You can choose to claim your rewards early in which case 5% of the total rewards together with the matured Delta will be transferred to your wallet. The remaining Delta will be redistributed to the Deep Farming Vault due to the vesting schedule interruption
If you choose, you can reinvest your earned DELTA rewards straight back into the staking vault, and this does not trigger any vesting periods.
rLP Staking
Staking your rLP is pretty straightforward. As owners of the rLP have provided permanently locked liquidity to Delta, they are rewarded with roughly a 30x staking bonus, for the entirety of the time they stake. These rLPs can be staked and unstaked at will, and never undergo any form of vesting.
DELTA Staking
DELTA token staking is a little more interesting. Initially staked DELTA will receive a 10x staking bonus. This bonus lessens each week, to 7x for the second week, 4x for the third week, then eventually 1x for the fourth week. If you want to maintain or boost your bonus on DELTA, you can add more DELTA to the staking contract each week. This adds a maximum 1x bonus per week up to a maximum bonus of 10x. The amount of DELTA required to be added to increase the bonus is equal to 10% of your staked DELTA. Half of this DELTA is added to your staked amount, and the other half gets permanently locked and removed from supply.
As touched upon above, you can reinvest your DELTA rewards, and this will provide a powerful compounding effect, by not only helping to increase and maintain the bonus but also increasing the amount of DELTA you have staked.
Getting Involved
If you head on over to delta.financial you will notice a countdown timer. At the end of this timer, the contracts for Delta will be made public, giving a 48hr window for people to review them. After this 48 hours has ended an event called Liquidity Staking Window (LSW) will begin. This is everyone’s first chance to invest in Delta Financial.
Liquidity Staking Window
The LSW is an event that runs for 10 days, giving investors the chance to deposit ETH and in return receive Delta rLP tokens at the end of the LSW. There is bonuses aplenty to be had, with early contributors receiving a whopping 30% contribution bonus! This 30% bonus linearly reduces down to 0 over the course of the 10 day event, so it is best to get in as early as you can. At this events conclusion, a maximum of 1500 ETH will be sent to a Uniswap pool to create a trading pair with DELTA. This will be your first chance to buy DELTA token, and will initially be the only place it can be bought and sold. The rest of the ETH contributions go to a liquidity reserve vault containing ETH and DELTA, providing additional guaranteed liquidity for options, that can be used as and when needed.
Referral Program
As well as bonuses for early contributions, the LSW is also running a referral program. By using someone’s referral link, or entering their Ethereum address, an investor will gain an additional 10% contribution bonus! The referrer will receive a 5% contribution bonus, as well as a 5% bonus in ETH claimable to their wallets. These 5% bonuses are calculated from the amount of ETH that gets deposited from investors who use the referral link/ETH address. A referral link will be able to be created once the 48 hour review period starts.
If this article has inspired you to take part in the LSW, and you wish to claim the 10% bonus, I would be incredibly appreciative if you chose to use my referral. Use the following link, and don’t forget to get in early for that additional bonus up to 30%!
Further Reading
Although I have tried my best to cover everything, there are much more technical articles available, and an entire ecosystem being built that is too much to cover in one article. I highly recommend you also check out the below;
Delta Financial Official Medium Articles — These take a deeper dive into the technicals of the Delta Financial system, and are essential reading.
Announcing CoreDEX — A brief introduction and outline for what is ultimately going to be built.
CoreDEX Black Paper — A more detailed look at what to expect from CoreDEX.
CORE Vault and Delta Financial —a perfect symbiosis — An excellent article written by Pavel Hadzhiev detailing how Core and Delta will both benefit from each other.
-Disclaimer-All information in this article is correct to the best of my knowledge. If you feel I have gotten anything wrong please do contact me on Twitter and I will make amendments. This article is intended for educational purposes and is not financial advice.
