Premia (PREMIA)

Premia is a decentralized options marketplace live on Ethereum and Arbitrum.

Basics

• Based in:
• Started in / Announced on:
• Testnet release:
• Mainnet release: V2 10-2021

Audits & Exploits

• Introduced one for V3, with up to $100k reward. No bug bounty program was documented (5-11-2021).
• Got multiple audits, one for V3.
• Premia has been audited according to Yield Farmer (12-12-2021).
• Scored a 62% on DeFi Safety (4-11-2021):

"Activity is more than 10 transactions a week on contract WETH-DAI Pool Proxy. Software functions are not covered by Premia documentation. As per the SLOC, there is 32% commenting to code (CtC). As per the SLOC, there is 669% testing to code (TtC). While there is no code coverage report, at 669% it is clear that this protocol has undergone rigorous, deep, hard and full bodied testing with every part of this protocol being fully examined. No test report was found. No documented formal verification was found. Premia's initial deployment has been audited post-launch. V2 deployed 3 weeks ago, and the pre-launch audit can be found here."

Governance

Admin Keys

• From DeFi Safety (4-11-2021):

"Governance information can easily be found. No pause guardian was documented.

a) All contracts are clearly labelled as upgradeable (or not) -- 0% -- no contracts are labelled as upgradeable b) The type of ownership is clearly indicated (OnlyOwner / MultiSig / Defined Roles) -- 15% -- governance is in control of the direction of the protocol, but it is unclear if the votes are binding. c) The capabilities for change in the contracts are described -- 0% -- contract change capability is not described."

Treasury

• Fees got changed. Further details can be seen under Token Utility and below under Fees.
• From their docs (12-2021):

"20% of protocol fees are distributed to the PREMIA treasury, to be used for the further growth and development of the Premia ecosystem."

Token

Token Allocation

• Seemed to have had a relaunch of its token, from their blog (7-9-2023):

1. "Total Supply: 100M
2. Initial Public Community Allocation: ~10M
3. General Course of Business: 7.4M
4. Liquidity Mining Emissions: ~30M
5. Blue Descent DAO: ~22M
6. Contributor Vesting: 21M
7. Premian Republic (Operating Group): 10M

At the time of writing, the circulating supply of PREMIA (including tokens locked as vxPREMIA for any duration) is ~35M."

• From their docs (11-2021):

1. 30% Cross-Chain Liquidity Mining Fund
2. 20% Development Fund
3. 10% Safety / Insurance Module
4. 10% Initial Distribution
5. 10% Founder Allocation
6. 10% Future Incentives Program
7. 5% Marketing and Education Fund
8. 5% Ecosystem Grants Fund

Utility

• From their blog (7-9-2023):

"PREMIA can be locked to tap into the economic extracts of Premia Blue: revenue share, fee discount, governance, and LM gauge voting. Cumulative fees from all sources will be divided to three parties: vxPREMIA holders, Premian Republic, and the Insurance Fund.

1. Staking Users receive 80% of base layer fees
2. Premian Republic receives 20% of base layer fees
3. Insurance Fund collects 100% of the fees from the vault and margin layers."

Technology

• Whitepaper or docs can be found here.
• Code can be viewed here. From DeFi Safety (4-11-2021): "At 1938 commits, Premia clearly places a premium on development documentation practices."
• Claims IP for its code.

Implementations

• Built on: Ethereum and Arbitrum and BSC

How it works

• From Yield Farmer (12-12-2021):

"Premia is an automated market maker (AMM) protocol offering pool-to-peer products. Each asset pair gets its own call pool and put pool, as depicted in the image above. Users can make single-sided deposits. For example, you can deposit just into the WETH side for the WETH/DAI pool."

Fees

• From their blog (7-9-2023):

"Premia Blue’s revenue share consists of multiple different sources of protocol fees — vaults, liquidity pools, trading fees, and even fees from options liquidity mining flow back to vxPREMIA.

In Premia Blue’s new model, protocol fees and commissions cascade into three distinct layers: base, margin, and vault.

All rates are subject to change via vxPREMIA governance vote and ratification.

1. Base Layer amasses commissions from the greater of either 3% of premiums paid or 0.3% of the notional value transacted. On settlement, a fee of 0.3% is collected, not to exceed 12.5% of the option’s value.
2. Margin Layer subtracts 0.4% from the Prime Rate (variable driven by supply and demand dynamics) charged to providers of margin lending liquidity. It also charges a dynamic liquidation fee.
3. Vault Layer includes a yearly 2% management fee and a 20% fee on positive returns for all native vaults built in-house. For vaults developed by third parties, fees will be negotiated on a case-by-case basis."

• From their docs (12-2021):

"The protocol must collect fees in order to grow and survive long-term. No fees are charged on deposit/withdrawal of liquidity from the Premia pools, rather, fees are charged when the pools facilitate a transaction between users.

Option Purchase: On option purchase, a protocol fee of 3% of the option's base price is charged to the buyer, included in the price quoted by the pool.

Option Exercise: On exercise, a protocol fee of 3% of the option's exercise value is collected, before distributing the remaining exercise value to the option holder.

As per community vote, 80% of all protocol fees are automatically collected and converted to PREMIA, which is then automatically distributed to xPREMIA holders (xPREMIA holders are PREMIA stakers). The remaining 20% of protocol fees are distributed to the PREMIA treasury, to be used for the further growth and development of the Premia ecosystem."

Staking

• From their blog (7-9-2023):

"Staked tokens become vxPREMIA when locked for a chosen period and cannot be unlocked or withdrawn until that period concludes.

1. Minimum lock-in period is 10 days
2. Maximum lock-in period is 4 years
3. Minimum withdrawal period is 10 days

It’s important to remember that every benefit from vxPREMIA scales with influence, which in turn scales with the size and length of the vxPREMIA lock.

Premia’s dual-token model serves four main purposes:

1. Governance: vxPREMIA holders gain the right to vote on proposals affecting the platform
2. Revenue Share: vxPREMIA holders receive 80% of protocol fees denominated in USDC
3. Utility: Holding enough vxPREMIA provides discounts on trading fees
4. Incentives: The amount of LM rewards allocated to each liquidity pool is managed by vxPREMIA voters."

• From their docs (12-2021):

"As per community vote, 80% of all protocol fees are automatically collected and converted to PREMIA, which is then automatically distributed to xPREMIA holders (xPREMIA holders are PREMIA stakers). The remaining 20% of protocol fees are distributed to the PREMIA treasury, to be used for the further growth and development of the Premia ecosystem."

Roadmap

• Can be found [Insert link here].

Usage

• From Bankless (6-9-2022):

"The protocol has attracted $7.0M in TVL."

Competition

• From Bankless (6-9-2022):

"Premia is unique in that unlike prominent options protocols such as Dopex and Lyra, it uses American Options, or options that can be exercised anytime before their expiration date."

Team, Funding and Partners

Team

• Full team can be found here (5-11-2021).

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