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Pain points

A viable decentralised options trading solution has yet to materialise due to:
Prohibitive trading costs due to high network fees
Extremely data intensive & require the ability for liquidity providers to mass quote a chain of options
lack of on-chain orderbooks
The protocol AMM is incapable of dynamically managing its liquidity while offering market takers competitive pricing and fees.

Solution

An Automated Market Making Protocol 【More details about AMM
Market Makers vs. Market Takers
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】which could
Solving for dynamic pricing & liquidity risk management issues & coupling this with traditional market making participants
A commercial-grade liquidity solution which allows anybody to join & give liquidity

What is Hxro?

Hxro Network is a decentralised liquidity network for risk-based applications built on the Solana blockchain.
Hxro Network will build a permissionless, fully-functional decentralized options exchange protocol that will support both standardised and exotic options on-chain.

HXRO Token

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https://www.hxro.network/hxro-token
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Governance
Reduced transaction fee payments
Volume tier-incentive rebate rewards
Staking Rewards
Builder Rewards

SAMM Protocol

A “smart” automated market maker built native to Hxro Network that provides on-chain liquidity to a simplified dual-outcome parimutuel market.

THEO Protocol

A self-sustaining, risk-managed automated market maker native to Hxro Network that provides on-chain liquidity specifically in a decentralised market for both vanilla and exotic options.
Hxro network will compose with Project Serum to integrate its order books, spot and perpetual markets (used for liquidity protocol hedging) and other needs vital to the network's functionality.

Market Protocols

Hxro Network will consist of market protocols that specify the necessary functionalities to facilitate the trading and risk management of multiple financial product types. The network will focus its efforts on three types of options markets:
Vanilla Options - Standardised, most commonly see on a traditional options exchange.
Exotic Options - More complex, Non-standard options that vary in their payoff structure, exercise terms and other contract components. Examples of exotics are 1-touch, Knock-Out, Barrier, Range and Bermudian options.
Parimutuel Markets - peer to peer, dual-outcome event markets where all positions are pooled together with the in-the-money (or winning) side sharing the pool pro-rata.

Parimutuel Markets

【If you do not know what is pari mutuel, I’ve made a note, check it out here:
Pari mutuel betting
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】
Comments from Enzo:
Pari-mutuel shield the market organizer from financial risk by paying the winners from the stakes of the losers.
Parimutuel: Enzo, Jessy & Bowen & others are in a common pool, with N outcome event, in this case the total pool will be the sum of all individual outcome pools.
If N = 2,
Enzo = $10
Jessy = $20
Bowen = $30
In these contexts, parimutuel markets are generally dual-outcome.
Winnners will be distributed the payoff from the money lost by the traders who took a position on the losing side (plus his initial position).
For traders, parimutuel markets offer a simplified way to trade risk. A parimutuel market can remove many of the complexities associated with execution and position management in a traditional trading market.
Additionally, because of the pooled nature of parimutuel markets, an imbalance in the distribution of assets to each outcome creates implied payoff odds.
This creates the potential for asymmetric payoffs in cases where the imbalance becomes significant.
Hxro Network will introduce a parimutuel protocol designed to support fully on-chain, peer to peer liquidity and market functions for a simplified dual-outcome parimutuel market.

Network Liquidity Protocols

THEO

Smart Automated Market Maker (THEO, theoretical values) provides liquidity to standardized vanilla and exotic on-chain options markets.
An AMM with external market context being provided by independent theoretical pricing nodes can allow a system to efficiently build liquidity across the volatility surface of any digital asset.
This result has the potential to solve the liquidity consistency problem typically faced by on-chain options markets whilst being efficient enough to keep fees to participants low. Ongoing governance is then required for parameter calibration to keep the system in a state of equilibrium.

SAMM

Smart automated market maker (SAMM) provides on-chain liquidity to a simplified binary-outcome parimutuel market. Using such a SAMM with external market context being provided by independent probability nodes can allow a system to bootstrap liquidity efficiently.
This result has the potential to solve the liquidity consistency problem typically faced by parimutuels whilst being efficient enough to keep fees to parimutuel participants low. Ongoing governance is then required for parameter calibration to keep the system in a state of equilibrium.
Bibliography:
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https://en.wikipedia.org/wiki/Exotic_option
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https://web.stanford.edu/~yyye/scpmfinal.pdf
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https://en.wikipedia.org/wiki/Parimutuel_betting
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