Buying a Potion
Buying a Potion contract is very simple. Head to https://potion.bonustrack.io and follow this process.
- 1.Select asset you want to insure
- 2.Select insurance strike
- 3.Select insurance end date (currently limited to 30 days)
- 4.Select quantity
Potion will display options selected, and current price of the asset. Potion gets this price in real time from https://www.coingecko.com/en.
If you believe there is an error in the price of the asset, you are able to toggle off Auto-Price, and enter accurate pricing manually.
Most times pricing displayed should be accurate, and auto-price is recommended. It is important though to check prices in several marketplaces, and the manual toggle can be enacted to indicate price manually if coingecko reported it inaccurately for any reason.
IMPORTANT: Introducing a wrong price value will result in losses for the buyer. Read more about disputes here.
To buy the potion contract, the user will have to pay a price, using DAI.
Potion uses a "perfect-pricing" system, that works in two steps:
- 1.At purchase: A premium deposit is paid - this is like "an advance", to guarantee the system will be able to charge the user once final pricing is available.
- 2.At liquidation: The final premium will be calculated. Potion buyer will then receive the difference between the final_premium and deposit_premium.
This guarantees to both potion buyer and seller that "perfect-pricing" was used, using actual observed volatility during the period the insurance was live.