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Simply Explained

Simply Explained: Hegic (HEGIC)

Updated: Jul 25, 2024
Published: Feb 21, 2023
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Hegic is a DeFi options protocol based on Arbitrum (an Ethereum layer 2). The platform’s goal is “[simplify] complex financial instruments and [help] ordinary people win big and pay less.” 

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Let’s get into it!

First, what are Options?

Options are a type of derivative (a complex financial instrument whose value is derived from an underlying asset). For example, crude oil is a commodity and an underlying asset. Crude oil futures are financial contracts that derive their value from the underlying asset (crude oil) that people trade. You can’t easily trade oil itself, but you can trade its derivatives. Traders use derivatives to speculate or to hedge (protect against) risk. 

An options contract is the right to buy or sell an asset at a set time in the future, at a defined price. Unlike a futures contract, which is a right, the holder is not obligated to do so. Read more about Options here.

How does Hegic work?

Hegic is an on-chain options trading protocol on Arbitrum. It uses a "stake and cover'' liquidity model. This means the liquidity to sell options comes from staked $HEGIC tokens. If traders on the platform are profitable, staked $HEGIC is sold to pay the debt. If they aren't profitable, the stakers earn the traders' losses, as well as any fees paid. For more, read Hegic’s whitepaper here.

Hegic users can trade 24/7 with no registration or KYC (know your customer) required. 

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Who are the founders?

Hegic was created by a pseudonymous developer known as Molly Wintermute, who was first active on Twitter in January 2020. 

$HEGIC

Hegic’s native HEGIC token is an ERC-20 token (a standard for creating and issuing smart contracts on the Ethereum blockchain). The token is used for governance voting, rewards (for trading and liquidity), and staking (to collect fees from the platform). Holders also receive a 30% discount when purchasing contracts. 

Tokenomics:

Hegic is now fully diluted (meaning all tokens are in circulation.) The total supply is 977,684,725 $HEGIC. Read more here.

Where can you buy $HEGIC?

You can buy $HEGIC on KuCoin, Gate, Uniswap, and 1inch. 

To find out Cryptonary’s transparent opinion on Hegic, check out our Rating Guide. 

Disclaimer: This is not investment nor investment advice. Only you are responsible for any capital-related decisions you make, and only you are accountable for the results.

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