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.