{"signature": "0xaa13defc221176b5b37c6f2f0e8e05b60958889a916238d4aaa6ba1b33d746a21d1a572a8e09b218905613dceb5f65110c12d4cd2bc27e75c44da14ba11656511b", "application": {"round": "0xb91b59c91b09d127d269e53019f2420e8c2c7ce7", "answers": [{"type": "email", "hidden": true, "question": "Email Address", "questionId": 0, "encryptedAnswer": {"ciphertext": "FwmZNc9HOpvX9Io6qLYy8TTycrRQP1rKbTSjXnX+Jvf7ELNr4qIb9NLtXZazvDer", "encryptedSymmetricKey": "2299e9eb77b330435b2a844f3368ec51365b6d64b287fe9edabb34076628ee85c33a93aff136b8d43d458dac2bbf750a4dc6da5fa4430511935273df7ea14f70743d6d9ac53903c571070a661a2dfd64e0da1f6ac2754b88dd085856eb67c1ab019ac549518ae4603720be42b4861c47e72f1d5a54d9435cff245bf10a298ea8000000000000002064c4bc9bbdf1422a16e6ec9f1da5299a61d99ca7270b0373bb22902b77abfe787393bec8a65fc7779728d36a6bd49cb9"}}, {"type": "short-answer", "answer": "@Marek314", "hidden": true, "question": "Telegram Handle", "questionId": 1}, {"type": "short-answer", "answer": "https://github.com/CarmineOptions/HoIL", "hidden": true, "question": "Project GitHub Repo", "questionId": 2}, {"type": "short-answer", "answer": "https://discord.gg/uRs7j8w3bX", "hidden": true, "question": "Link to your Public Group Chat", "questionId": 3}, {"type": "short-answer", "answer": "GG18 and GG20, but with more broader scope", "hidden": true, "question": "Have you participated in a previous Gitcoin Grants Round? If so, please name the rounds or link the builder profile associated with previous rounds.", "questionId": 4}, {"type": "paragraph", "answer": "**Hedging Against Impermanent Loss**, contributes significantly to the growth of the DeFi ecosystem by mitigating one of its biggest risks: **impermanent loss**. This encourages liquidity providers (LPs) to participate in automated market makers (AMMs) without the constant fear of losing funds due to price fluctuations. With this product:\n\n- LPs are more likely to provide liquidity, enhancing the overall depth and liquidity across multiple DeFi protocols.\n- This product allows for broader adoption among both new and experienced users.\n- As an open-source solution, the code can be adapted and used by other projects, further contributing to the composability of DeFi protocols.\n\nThis approach aligns perfectly with the OSS mission to foster collaboration, share innovations, and drive growth across the Web3 landscape.\n", "hidden": true, "question": "How does your project contribute to the growth of the OSS ecosystem? Please provide specific examples of how your application enhances or expands the current ecosystem.", "questionId": 5}, {"type": "paragraph", "answer": "-  **Cross-Chain Capability**: Leveraging interoperability, the product is designed to operate across multiple chains, making it accessible to both EVM and non-EVM chains. \n\n- **Protection Against Impermanent Loss**: By utilizing a pool of European options, the product enables LPs to hedge against the price volatility of assets in liquidity pools. This protection mechanism shields them from the downside of impermanent loss, which is one of the biggest deterrents to providing liquidity. This feature can be a game changer for large players, including but not limited to \u2018whales\u2019.\n  \n- **Customized Risk Profiles**: LPs can choose the level of risk they want to hedge based on their position size and duration in the pool. This customization allows users to tailor the product to their specific needs.\n\n- **Underwriters**: Our platform allows underwriters to participate by taking on the impermanent loss risk in exchange for a premium. This creates a balanced ecosystem between risk-takers and those seeking protection.\n\nBy combining these features, the product differentiates itself as a powerful and flexible tool for managing risk, while also providing clear incentives for LPs to engage.\n", "hidden": true, "question": "What features or use cases does your dApp/App present? How is it differentiated?", "questionId": 6}, {"type": "paragraph", "answer": "The roadmap for further development is focused on expanding the functionality and adoption of **Hedging Against Impermanent Loss**. Here's how we plan to use the grant funds:\n\n- **Pricing improvements**: Continue refining the core product by optimizing the pricing models of European options, improving the user interface, and ensuring seamless cross-chain functionality.\n\n- **New follow up products**: Will continue extending the hedging product range. First through protecting against inventory risk.\n  \n- **Audits and Security**: Allocate a portion of the grant to conducting rigorous smart contract audits to ensure the security of the platform.\n\n- **Liquidity Mining Campaigns**: Launch campaigns to attract more underwriters and liquidity providers by incentivizing them to participate in the protection pool. This will further enhance the liquidity and availability of impermanent loss hedging.\n\n- **Cross-Chain Deployment**: While our initial focus is on the Starknet ecosystem, we aim to deploy on multiple EVM-compatible chains, thereby increasing the reach and impact of the product.\n", "hidden": true, "question": "What are your plans for further development, and how will the grant funds be used to achieve these goals?", "questionId": 7}, {"type": "paragraph", "hidden": true, "question": "For any project deploying smart contracts on blockchain networks, please list all your deployer addresses and their corresponding blockchain networks. Use this format for each entry: [deployer_address], [chain_id]\u2014for example, 0x123abc..., 42161 (This represents a deployer address on the Arbitrum network). Please include a separate line for each unique deployer address and blockchain combination.", "questionId": 8}], "project": {"id": "0xb6ef3de56ec058374cd8fbb76b2385811646e959b7731ed168716ca7a55fc562", "title": "Hedging Impermanent Loss - Carmine Finance", "logoImg": "bafkreigux6kld4cdnkdojiib3cqp6elnhznrzd3tgvtedyyhhqw3z7lhxu", "metaPtr": {"pointer": "bafkreiedt25bwxzc424xa7ryevxyvn3jfffcppr3aa3uf3lbrewfboxuee", "protocol": "undefined"}, "website": "https://carmine.finance", "bannerImg": "bafkreicso3z6qskuafwywlaw52wydolpxzwbah3fbmsmkgiroqre4pnlgu", "createdAt": 1722638834590, "userGithub": "MarekHauzr", "credentials": {"github": {"type": ["VerifiableCredential"], "proof": {"jws": "eyJhbGciOiJFZERTQSIsImNyaXQiOlsiYjY0Il0sImI2NCI6ZmFsc2V9..G5CEvxJJRS9bsL_XUTdMtCyRnOCiP74FRNjnTptW9U2z0-5BYRLjCLu6aP3WIiRB2DpwZMG0YzTyEEOOIiOZBg", "type": "Ed25519Signature2018", "created": "2024-08-02T22:34:40.693Z", "proofPurpose": "assertionMethod", "verificationMethod": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC#z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC"}, "issuer": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC", "@context": ["https://www.w3.org/2018/credentials/v1"], "issuanceDate": "2024-08-02T22:34:40.693Z", "expirationDate": "2024-10-31T22:34:40.693Z", "credentialSubject": {"id": "did:pkh:eip155:1:0xa4ad2Ee4f67C3C83a0081060b6AeA2c88dFc36f3", "hash": "v0.0.0:JAS8uz296DOPQ9sRKz0ylsZPylXd712Wb2VccPneRKA=", "@context": [{"hash": "https://schema.org/Text", "provider": "https://schema.org/Text"}], "provider": "ClearTextGithubOrg#CarmineOptions#8970363"}}, "twitter": {"type": ["VerifiableCredential"], "proof": {"jws": "eyJhbGciOiJFZERTQSIsImNyaXQiOlsiYjY0Il0sImI2NCI6ZmFsc2V9.._1qU8octOchSLUeZPQ9oNNL19VSCi9JBPCHXTxGkUWUcMjdmgrB9nEQlZciD2eKEnQ2bJsDRhJ7rf8KqHmHVCQ", "type": "Ed25519Signature2018", "created": "2024-08-02T22:34:12.533Z", "proofPurpose": "assertionMethod", "verificationMethod": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC#z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC"}, "issuer": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC", "@context": ["https://www.w3.org/2018/credentials/v1"], "issuanceDate": "2024-08-02T22:34:12.533Z", "expirationDate": "2024-10-31T22:34:12.533Z", "credentialSubject": {"id": "did:pkh:eip155:1:0xa4ad2Ee4f67C3C83a0081060b6AeA2c88dFc36f3", "hash": "v0.0.0:qV06sSdtpQ7+Uh76iKrEExK5BscVkbueF7emVwGRg08=", "@context": [{"hash": "https://schema.org/Text", "provider": "https://schema.org/Text"}], "provider": "ClearTextTwitter#CarmineOptions"}}}, "description": "# Hedging against Impermanent Loss\n\nHedging against Impermanent Loss smart contracts is a simple tool that will enable AMM liquidity providers to hedge against Impermanent Loss. In today's high-volatility and price-uncertain environment, the need for effective risk management tools is more critical than ever.\n\n**Carmine Finance has a simple goal. Take care of crypto risk.**\n\nThe team behind Carmine Finance has been building risk management solutions for a couple years. Right now we are working on a smart contract that will hedge Impermanent loss and will enable the community to manage this risk and mainly build novel solutions on top of it thanks to the composability in DeFi.\n\nThe smart contract that will allow for hedging the Impermanent Loss will be built as a portfolio of options that has an opposite P&L curve to the Impermanent Loss. Because of the discreteness of options\u2019 strike prices the hedge will not be perfect.\n\nThe initial version will cover Impermanent Loss of constant product function AMMs and the consequential versions will allow for a more generic version that will cover concentrated liquidity AMMs. \n\n### Example Implementation:\n\nFor example, consider a user who is providing liquidity to an AMM on Polygon. The objective is to offer a B2B2C solution with the AMM, allowing the user to hedge against impermanent loss directly. Here\u2019s a breakdown of how it works:\n1) **User Interaction**: As the user engages with the AMM, they are presented with an option to hedge against impermanent loss, seamlessly integrated within the AMM\u2019s interface.\n2) **Hedge Purchase**: The user decides to purchase the IL hedge. Behind the scenes, this process is efficiently managed to ensure ease of use.\n3) **Cross-Chain Operation**: Funds are securely bridged from Polygon to Starknet. Once on Starknet, the IL hedge is executed using specialized smart contracts.\n4) **Tokenization and Bridging**: The user receives an IL hedge token representing their hedged position. This token is then bridged back to the user's wallet on Polygon, enabling them to manage their hedge directly from their wallet.\n\nCarmine Finance team has been working on and delivering on following projects\n- **DeRisk:** A platform that facilitates independent risk monitoring and mitigation strategies, enabling users to safeguard their digital assets proactively.\n- **Options AMM:** A foundational tool for the community to create diverse hedging products, allowing for flexible risk coverage tailored to their needs.\n- **Konoha:** Governance framework that is an accessible and customizable system that empowers any Starknet protocol to innovate with token creation, distribution, and staking, reinforcing community-led governance.\"\n\n", "lastUpdated": 0, "projectGithub": "CarmineOptions", "projectTwitter": "CarmineOptions"}, "recipient": "0xa4ad2Ee4f67C3C83a0081060b6AeA2c88dFc36f3"}}