Basic knowledge you need to know
Crypto Wallet
What is a Crypto Wallet?
A cryptocurrency wallet (also known as an e-wallet) is a software application that stores cryptocurrencies such as coins, tokens, and NFTs. The key difference between this wallet and a bank account is that it has stronger security due to the information encryption process, does not identify the owner of the wallet, and the money saved in the wallet is a coin or NFTs, Tokens, etc.
When creating your own cryptocurrency wallet, you must pay attention to 3 essential components: Wallet Address, Private Key and Passphrase.
- Wallet Address
A wallet address (also known as a public key) is a randomly generated string of alphanumeric characters. In the same way that a bank account number is used to transfer and receive money, a wallet address is used to send and obtain cryptocurrency.
An example of a wallet address: ABmzcnv8dklfgukHFGsaynfdjkfguKHF9821
- Private Key
The Private Key is a random string of alphanumeric characters that is used to secure your wallet. You will be instructed to save the Private Key when creating a wallet on any platform. Because this is the only key that allows you to access your crypto wallet, keep it as private and secure as possible.
An example of Private Key: 56fdlgdvguzywFzdBAFLkugpwpsg15nL
- Passphrase
Passphrase is also a type of Private Key. It is made up of 12-24 random English characters that are utilized to encrypt data.
An example of Passphrase: school inside church come from lab dog demand july wave tram.
How many types of crypto wallets are there?
- Centralized Wallet
When registering to participate in trading on centralized cryptocurrency exchanges such as Binance, Kucoin, MEXC, etc., you need to create an account on the exchange. In that account, exchanges will create wallets for all coins and tokens listed on the exchange. Players only need to choose the correct coin/toke they want to deposit, copy the wallet address, and deposit money.
In the case of this wallet, users do not need to save the private keys but just need to remember the account password for that exchange.
– Advantages: There is no need to build a wallet; just open an account.
– Drawbacks:
The level of security is not as high as that of a decentralized wallet.
Your assets are deposited on the exchange and are completely under the custody of the exchange.
Risk from a third party (exchange) if there is an issue (for instance: Risk from a third party (exchange) if there is an issue (for instance: the exchange is hacked, being bankrupted, scamming such as users cannot withdraw money, etc.)
- Decentralized wallet: Including Hot Wallet and Cold Wallet
Hot wallets are always-connected electronic wallets. For instance, TrustWallet and Metamask.
Users can access their wallets from any location that has an Internet connection. Hot wallets enable extremely quick and easy transactions.
– Advantages: It is free, has far more functions, and can be accessed easily via a phone app or a browser extension.
– Drawbacks: Less secure than cold wallets because the Private Key info is stored directly within the app or extension. Hackers can attempt a cyberattack since this data is constantly linked to the network.
Cold wallets are typically in the form of USB or other physical wallets. It is possible to receive cryptocurrency quickly when it is sent without an internet connection. To monitor balance fluctuations, connect your cold wallet to the internet.
For example, Ledger Wallet, Trezor Wallet, etc.
– Advantages: Enhanced security
– Drawbacks: Expensive and has limited flexibility
How to use a crypto wallet?
E-wallets are used to transfer and receive coins, tokens, and NFTs via wallet addresses. Users must remember and preserve their private keys and passphrases in order to make transactions.
Warning: Important notes when using a crypto wallet
Always double-check the wallet address: Before executing a transaction, double-check that the recipient’s wallet address is correct. Some dangerous tool programs can alter the wallet address you copied to the wallet address of another hacker.
Be careful that you use the actual address of the official exchange website or online wallet rather than the fake website when logging in. The hacker will next request authorization to access your wallet via a real web-like interface. Your property will be stolen if you accept. Take note of the domain name as well as the source of the link that refers to the domain name.
Maintain multiple wallets: Divide your funds into multiple wallets, one for daily transactions and the rest in a separate wallet. This is a very effective method for reducing risks and safeguarding your digital assets.
If you don’t want to get hacked, don’t reveal your Private Key or Password to anyone.
Additional common concerns include:
– Obtaining unusual tokens. Harmful tokens in airdrops seek users for permission to swap or confirm.
– When logging in to a new browser, Crypto Wallet frequently asks users to re-import token addresses and accounts in the wallet. Many users are unaware of this when they access the internet, thinking their wallet is defective, ask someone else to get it and give their Passphrases or Private key.
Options
History of formation and development
In the 17th century, merchants in Osaka (Japan) experimented with early versions of forward contracts (one of four derivatives instruments), which allowed buyers and sellers to lock in commitments for future delivery at predetermined prices.
Derivatives, like most financial instruments, can be used for speculation, but their primary function is to aid risk management experts. The 18th-century emergence of Japan’s Dojima Rice Exchange demonstrates how derivatives played a significant role in managing the risks associated with the country’s rapidly modernizing economy.
The Chicago Board of Trade (CBOT) was founded in the 19th century, 200 years after Japan experimented with derivatives in the rice market. Even after paying all upfront expenses, America’s merchants faced the challenge of being vulnerable to significant price risk (for example, what if prices dropped unexpectedly in the spring?). To protect themselves from price fluctuations, merchants traveled to Chicago and signed contracts to supply futures grains at market prices on the due date. Futures and options contracts have grown rapidly and significantly since then.
According to Investopedia, the derivatives market on June 30, 2022 is, in a word, massive – often estimated at more than $1 quadrillion on the high end. What makes this possible? Mostly because derivatives are available on almost every type of investment asset, including equities, commodities, bonds, and currency. Some market analysts believe the market is worth more than ten times the total global GDP.
While futures contracts offer many great opportunities, they also carry many risks. Options contracts, on the other hand, are an effective portfolio protection tool that investors prefer to insure their property with. Furthermore, by predicting future price points, options help to stabilize the financial market.
How many types of options are there?
Options contract is a form of contract to buy and sell assets in the future at a specified price and time. There are two types of options: Call options and Put options. Participants can Buy (or Long) or Sell (or Short) these options.
In which, the Buyer (in Long call or Long Put position) will have to pay the seller an option fee or Premium option price for the right to buy or sell this asset in the future.
The seller has the obligation and responsibility to fulfill all obligations to the buyer (the contract cannot be canceled, the property must be mortgaged until maturity).
The most common and effective use of options for investors is to help hedge risks and efficiently safeguard portfolios against large fluctuations.
Not only that, but options have the impact of multiplying the initial investment by several times (5 to 20 times and even more), giving investors the possibility to earn big gains while bearing the danger of losing. The hole is not too large.
Examples of options
Let’s look at one simple case of using Options to protect investment portfolio:
Assume the spot price of ETH right now is $1000.
Lily listens to forecasts and predicts that ETH will fluctuate +-20% over the next week.
Instead of investing $1000 to buy one ETH, Lily only needs a little bit of money to buy ETH’s Call options contract on Friday. This sum of money is called Options premium. (Typically, around 5% of the overall value; in this example, $50.)
On expiration date:
- If the price of ETH increases to $1200:
Lily will have a profit of: 200-50 = $150, which is 300% of her initial investment.
Instead of paying $1000 and profiting merely 200 (a 20% profit),
- If the price of ETH falls to $800:
Lily only lost the Options premium amount of $50, instead of $200 without buying Options. This amount only accounts for 5% of the capital she tends to invest in ETH initially.
Lily can either sell her acquired Options back if a price is found, or retain it until the exercise date.
This provides Lily with a small investment but more opportunities and time to produce rewards that are many times the initial amount.
Options Jargon
An options is a financial product that gives the trader the right, but not the obligation, to buy or sell a particular underlying asset (e.g., Crypto coin) at a specified price (the strike price) by a set future time (expiry date). There are two kinds of options, calls and puts.
A Call options or Calls allows the trader to lock in the strike price (buy price) at which to buy the asset by the expiry date.
A Put options or Puts allows the trader to lock in the strike price (sell price) of the asset by the expiry date.
In each type of options, the investor can choose to buy or sell the options.
You buy Calls when you think the underlying asset may increase in price, and you buy Puts when you think the underlying asset may decrease in price.
Options also have an expiration date on which you decide if you want to exercise your option or not. The seller is responsible for exercising those rights for the buyer.
Options can have different strike prices and different expiration dates. As a result, options provide traders with much better hedging and liquidity solutions.
- Buy Call Options
People buy call options when they think the price will increase in the future.
The buyer will lose a premium (which acts as a deposit for the option seller).
If the market goes up, investors can have infinite profits.
If the market goes down, the investor will suffer the biggest loss with only the Premium amount spent.
- Buy Put Options
If you think the price will fall in the future, you can buy a put options for a premium.
If the price falls, you will have a big profit.
If the price rises, you can lose, but the biggest loss is equal to the Premium you paid.
- Sell Call Options
If you think the price will fall, you can also sell the call to get a profit from the premium.
However, when the price rises, you can experience infinite losses.
- Sell Put Options
If you think the price will rise, you can sell the put to receive a premium from the buyer.
However, your risk will be large because the entire collateral amount (equivalent to the breakeven value) of the underlying asset is locked to the transaction. This is to ensure that you can afford to buy back the underlying asset when its price falls below the breakeven price on the expiration date of the sold-put options.
If you think the price will rise, you can sell the put to receive a premium from the buyer.
However, your risk will be large because the entire collateral amount (equivalent to the breakeven value) of the underlying asset is locked to the transaction. This is to ensure that you can afford to buy back the underlying asset when its price falls below the breakeven price on the expiration date of the sold-put options.
Orderbook
A list of orders on a particular asset reflecting all the orders from the different buyers and sellers open in a market. It effectively shows the price and volume that participants are willing to buy/sell the asset for.
AMM
Is an Automated Market Maker (AMM) which uses an algorithm to define the price that it will buy or sell an asset at.
Options
Contracts, which let the buyer of a call (put) choose whether or not they want to buy (sell) the underlying asset at the strike price once the contract hits its expiry date.
Binary option
Options that are based on a binary success or failure outcome. The parties that choose the correct outcome (success of failure) win the entire pot.
Call Options
Gives the buyer the right (but not obligation) to purchase an asset at the particular price and date specified in the contract.
Put Options
Gives the buyer the right (but not obligation) to sell an asset at the particular price and date specified in the contract.
Premium
Is the market price of purchasing an options. By paying the premium you purchase the right to exercise an options. The seller receives this premium as their payoff for selling the options.
PnL
Profit and Loss. It represents the change in the value of a trader’s position. Whilst a trade is still open PnL is considered “unrealised” and when the trade is close it becomes “realised” PnL.
Exercising an Option
The event in which the buyer of an options choses to execute the options contract they purchased in order to buy or sell the underlying at the strike price.
Settlement
Occurs when an options is exercised. In the case of physical settlement, there is a transfer of assets between the seller and buyer of an options to reflect the contract that was exercised. In the case of cash settlement, the trader exercising the options is paid out in cash (no exchange of assets) based on their PnL.
Naked Option
Shorting an option without holding any (or enough) of the underlying asset to protect from adverse price movements, exposing the trader to high amounts of unhedged risk.
Collateral
An asset accepted as security for a loan or credit risk. In the case of options collateral is required to make sure that the trader can cover their position if they get margin called.
Greeks
- Delta,\deltaδ– The price sensitivity of the option relative to the underlying asset i.e. how much the option price changes when the underlying assets price increases by $1. When buying a call option the delta is positive, when buying a put option the delta is negative.
- Theta,\thetaθ – Reflects the options price sensitivity with respect to time i.e. the $ change in the option price given time moved 1 day closer to the expiry.
- Gamma,\gammaγ – Reflects the rate of change between the Delta and the underlying asset price i.e. given a $1 change in price the Delta will change by the Gamma.
- Vega,\nuν – The price sensitivity of an option with respect to a change in the underlying asset’s implied volatility i.e. the $ change in the option given a 1% change in the underlying assets implied volatility.
Hedging
The act of purchasing complementary (usually inverse) assets to reduce the trader’s risk exposure to sudden adverse price movements. Options are a popular method to hedge risk as they allow traders to limit their losses to a fixed amount, almost acting as insurance.
Options Pricing (Giá quyền chọn)
Spot Price,SS
Is the current market price of the underlying asset.
Strike Price,KK
The price defined in an option contract specifying the price that the underlying asset will be bought/sold at.
Expiry Time,TT
The date specified in the option contract at which the option can be exercised (European options) or that time before which options must be exercised (American options).
Risk-free Rate of Return,rr
The theoretical rate of return on an investment that carries no risk.
Volatility,\sigmaσ
Reflects the extent to which the underlying asset is expected to fluctuate between now and the asset expiry.
Mark Price, V_{mark}Vmark
The last price at which the option was purchased/sold on the market.
Index Price, V_{index}Vindex
The price of the underlying asset, where this price is derived from more than 1 source.
Options Strategies (Các chiến lược quyền chọn)
Covered Call
Long coin + short call.
Covered Put
Short coin + short put.
Debit Spread
Long lower strike call + short higher strike call, long higher strike put + short lower strike put.
Credit Spread
Short lower strike call + long higher strike call, short higher strike put + long lower strike put.
Short Straddle
Short call + short put on the same strike.
Short Strangle
Short call on higher strike + short put on lower strike.
Blockchain - Web3
What is Blockchain?
Blockchain is a decentralized database that stores information in encrypted blocks that accumulate over time to form a chain. Each block in the Blockchain will be linked to the one before it and will include information about the moment the block was created, as well as a timecode and transaction data.
Because there is no prior block, the Hash of the first block is string zero. It’s also known as the Genesis Block or the Primordial Block.
The newly produced Block will be added to the Chain by connecting the Previous Hash of the block to be added with the hash of the previous block, resulting in the formation of a Blockchain.
The first block, because there is no block before it, whose hash is string zero. And it is called the primordial block or Genesis Block.
The newly created block (Block) will be added to the chain (Chain) by connecting the Previous Hash of the block to be added with the hash of the previous block and form a Blockchain.
The Structure of each Block (Block)
Each block consists of 3 components: data (Data), hash code (Hash), and the hash code of the previous block.
Why is Blockchain supposed to be indelible and hackable?
The Blockchain consensus algorithm is the agreement by the majority of nodes in the network to check that the information in the record is true, allowing transaction information to be stored in the blockchain.
If there is a change in a network block, this information will be compared to information from other blocks. If there is a discrepancy, the data cannot be written into the Blockchain. That is how blockchain is intended to withstand data modification.
Example: If there is a change on one block. In this case, assuming that a hacker attacks and modifies data on block A. At the time:
The hash of block A is adjusted.
The system will compare the hash to the previous block hash and discover any differences.
As a result, the hacker must update the hash of the block before A. The system finds the fault in the previous block A-1 once more. Similarly, the hacker must continually modify the hash of block A-2.
Because of the consensus system, the hacker must change all of the blocks to change the transaction.
History of formation and development
Nakamoto designed bitcoin to be a type of cash that could be sent peer-to-peer without the need for a central bank or other authority to manage and maintain the ledger, similar to how actual cash can be. He published a seminal essay in 2008 and launched the original code in 2009.
While it was not the first proposed online currency, the bitcoin concept solved various challenges in the area and has been by far the most successful.
The blockchain is the engine that powers Nakamoto’s bitcoin ledger; the original and largest blockchain is the one that still orchestrates bitcoin transactions today.
As a result, Blockchain is commonly viewed as a transaction log or an electronic ledger distributed across several computers that saves all transaction information and assures that information cannot be changed in any case.
Six key blockchain features you need to know:
Decentralized: Blockchain functions autonomously, using computer algorithms and is not controlled by any single entity. As a result, blockchain minimizes the hazards posed by third parties.
Distributed: This occurs when blocks with the same data are spread in different locations. So, even if one location is lost or damaged, the data remains on the Blockchain.
Immutable: Because of the properties of the consensus algorithm and the hash code, once data is written into a blockchain block, it cannot be changed or updated.
Secure: Only the owner of the Private Key has access to the data contained within the Blockchain.
Consensus: All transactions in the blockchain are recorded and can be viewed by anybody. We may then check and retrieve the transaction history. Decentralization allows others to access a portion of the information on the Blockchain.
Smart contract integration: When the previous conditions are met, the smart contract will be performed, and no one can stop or cancel it.
Some of the most common Blockchain applications
Blockchain applications in Production
Blockchain will replace smart devices to enable effective administration, including product production process tracking.
Consumers can verify product information to see the quality and differentiate phony items, as well as follow the history of the product’s manufacture and transit.
Blockchain applications in E-commerce
The most pressing concerns in the realm of e-commerce are security, supply chain management, and the process of transferring items to consumers while lowering obstacles. Smart contracts save money.
Blockchain Health Applications
When Blockchain is used in healthcare, all authorized parties will have instant access to the same precise and verified information, which will be transparent to both patients and doctors.
The record store cannot be altered.
Blockchain uses in Education
Smart contracts and Blockchain also enable automatic enforcement of agreements in training laws, school management and violations.
Blockchain Use in Banking and Payments
Blockchain security and smart contracts will let clients avoid third-party intermediaries and reduce security threats. Because coins may be accessed and transferred to each other from anywhere in the world at a relatively fast and low cost. This allows people in countries without a banking institution to transact and send money to one another. However, it will generate problems and challenges in bank management. nation.
Blockchain is also used in many other sectors, such as IoT, gaming, agriculture, and so on.
What is Web3?
Web3, or Web 3.0, is the third generation of the internet, envisioned as a serverless intelligent Internet composed of interconnected decentralized webs. It is an Internet in which users have total control over their own data, identities, and fate.
Web 3.0 will not, as in the past, build and deploy applications centrally on a single server or database; instead, Web 3.0 will be run on a blockchain network, a decentralized network of many peer-to-peer nodes, or a combination of the two to form an economic protocol associated with cryptocurrencies. These applications are known as decentralized applications, and they will be prevalent in Web 3.0.
Web3’s characteristics
– Privacy: Users have the right to manage and use all of their information and assets.
– Verifiable: All information is transparent and can be validated on the blockchain.
– Connection: All information will be linked with metadata to assist customers in searching for and receiving information as accurately as possible.
– All mobile devices will be linked to web 3.0, allowing visitors to connect and view material from anywhere, at any time.
– Artificial intelligence (AI): Information will be received and processed accurately, with technology comprehension similar to humans, resulting in the most accurate outputs.
– 3D graphics: With web 3.0, 3D designs will be used more frequently, particularly in service websites to provide clients with an overview and vivid view.
Transaction
TRANSACTION
DBOE Academy allows players to participate in early-stage trading experiments.
NUSD (Non-USD) digital currency exchanges are only for practice and experience trading. Participants will be able to practice theoretical and options trading tactics on the bitcoin market in real-time, on the Mainnet.
Players must complete quests to gain rewards in order to receive NUSD coins for trading.
The following are detailed instructions for trading on dboe.exchange:
DBOE Options
DBOE, like traditional options, allows users to make transaction of full 4 options positions: Long Call, Long Put, Short Call and Short Put.
However, the market price of cryptocurrency fluctuate significantly, which can result in traders incurring indefinite losses or causing their accounts to be burned (this is most prevalent with Sell/Short options positions). To minimize risks for option sellers, DBOE uses Bull and Bear Spread Strategy with Strike and Conditional Strike price, which assists all traders in better limiting their risks while still making large gains.
DBOE applied Web3 technology as well as the improved features of Cefi and Defi, allowing participants to trade directly. To start trading, simply connect your wallet (Metamask) to the exchange. Completely secure, allowing players to own their accounts and information without having to deposit money to the exchange.
Using the CLOB model in trading, transactions become more liquid, transparent, and familiar to players.
More information on DBOE can be found here.
