How does NFTCall work?

NFTCall is an NFT options trading platform on Layer-2 that uses a peer-to-pool model and auto market making mechanism. It enables NFT investors to trade NFT options against liquidity pools, speculate or hedge against price fluctuations, while liquidity providers can earn premiums from auto market making.

NFTCall Surge has two key user groups, namely liquidity providers and options traders.

• Liquidity providers (LPs) deposit liquidity into the vault as option sellers. The vault automatically provides market-making services through an AMM model, helping LPs earn option premiums.

• Option traders use NFTCall Surge to buy call or put options for speculation or hedging risks. Options buyers need to pay option premiums to LPs, and the pricing of options is determined by the AMM module and Black-Scholes formula.

NFTCall Surge currently supports European-style options, which are settled in cash and can only be exercised at expiration. In addition, the protocol uses floor prices to evaluate the price of each NFT collection uniformly. When opening a position, options buyers can choose any out-of-the-money (OTM) strike price within a range, in other words, buyers can purchase NFT covered calls and protective puts in the platform.