What is Hook Protocol? Hook Protocol is a decentralized options trading platform for NFTs on the Ethereum ecosystem. Let’s find out what is special about this project with Weakhand in this article.
What is Hook Protocol?
Overview of Hook Protocol
Hook Protocol is a decentralized options trading platform for NFTs on the Ethereum ecosystem. Users can create, buy and sell options on ERC 721 NFT assets.
Objects participating in the platform:
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User: Buy and sell options listed on the Hook Protocol platform. Additionally, users can make offers with specific NFTs by place an Offer order with parameters such as: Exercise price, expiration date,…
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Options writer: NFT owners can write options for their NFTs and list them on the Hook Protocol platform to receive premiums when users exercise their options. Additionally, option writers can sell options immediately from Offer orders from buyers.
Hook Protocol’s operating mechanism
The operating mechanism on the Hook Protocol platform is quite simple and takes place through the following steps:
- Step 1: Anyone who owns an ERC 7212 NFT can transfer it to the protocol to write options contracts. The contracts in options include: Expiry date, exercise price and premium.
- Step 2: Hook Protocol holds the writer’s NFT and mints a new option NFT in the form of a token to represent the writer’s option.
- Step 3: Writers can list these options NFTs on the platform to receive premiums from buyers.
- Step 4: Anyone can buy options from the writer before the expiration date to trade for profit. Additionally, they can place Offer orders for option writers.
24h before the options expire, Hook Protocol starts the auction for the NFT and the following occurs:
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If the highest bid in this auction is less than or equal to the strike price, the option writer keeps the original NFT and receives the premium.
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If the highest bid in the auction is higher than the strike price, the option writer earns money from the exercise of the strike price and the premium. NFTs are sold to the highest bidder, and the option buyer profits from the price spread (the difference between the highest bid and strike price).
What is the difference between Hook Protocol?
Hook Protocol creates an open marketplace where anyone can create, buy, and sell options without the limitations of the supported NFTs. Additionally, Hook Protocol is having a deployment strategy Multichain to help more people access the platform.
Core Team
Update…
Investor
June 29, 2023: Hook Protocol announced the successful call for $3M USD led by Collab Currency and Lattice Fund. There is also the participation of other investment funds such as: The LAO, Slow, Flamingo,…
Tokenomics
Update…
Hook Protocol Project Information Channel
- Website: https://www.hook.xyz/
- Twitter: https://twitter.com/HookProtocol
- Discord:
summary
The Options market for NFTs is still a fairly new market and has few development projects. Hook Protocol was one of the first projects to lay the foundations Options NFT. Hopefully with the information in this article, everyone has some understanding about Hook Protocol.