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Potion parameters

ASSET

Refers to what the insurance is being applied on. At the moment the following crypto assets are available:
  • BTC
  • ETH
  • LINK
  • MKR
  • BAT
The list will grow to include hundreds of assets, including non-crypto assets such as Gold, S&P500, or Tesla.

STRIKE

This refers to the value at which the option starts acquiring value. This is how strike affects the value of the payoff the contract entitles the holder to:
Price of underlying > Strike : 0 Price of underlying < Strike : Strike - Price
Example: ETH price is $200. Potion contract with strike $250 is worth $50 Potion contract with strike $150 is worht $0
The lower the strike relative to price, the lower the cost of the insurance premium will be.

EXPIRY

Potions, like insurance contracts, are valid during a limited period.
Potion holders can exercise the value of their contract during t < expiry.