Charm Finance is an AMM (automated market-maker) for options on Ethereum

It uses an LS-LMSR (Othman et al., 2013) to price the options. In short, it acts like token bonding curve, minting/burning option tokens as users buy/sell them.

At expiration, the settlement price is fetched from a Uniswap V2 oracle. Users can them redeem their options for the settlement value

This repo also includes an ERC20 governance token and staking reward pools

Please note the owner of the options market is highly privileged and has the permissions below. These are only intended to be used in an emergency situation. These permissions will be removed in future versions.

• Pause the contract indefinitely. This includes preventing users from buying, selling, and redeeming their options.

• Change the contract’s oracle. If an invalid or malicious oracle is provided, users can potentially lose funds.

• Change the contract’s expiry date.

• Prematurely settle the contract before its expiry date.

The main contract is OptionsMarketMaker.sol. This contains methods buy and sell that let users mint/burn options. Calling settle after expiration fetches the settlement price from the oracle and users can call redeem to redeem their options for the settlement value.

OptionsToken.sol is an ERC20 token representing ownership of an option.

UniswapOracle.sol is used by OptionsMarketMaker.sol to fetch the TWAP price at expiration from a Uniswap market.

CharmToken.sol is an ERC20 token that will be distributed as incentives/rewards and used for governance

rewards/StakingRewards.sol let users stake an ERC20 token to receive Charm tokens. It's based on https://github.com/Synthetixio/synthetix/blob/develop/contracts/StakingRewards.sol.

rewards/SeedRewards.sol is similar to StakingRewards.sol but instead of receiving/sending a staking token, it directly buys/sells options in the market-maker. This allows users to deposit/withdraw liquidity with a single transaction.

Pausable.sol is extended by OptionsMarketMaker.sol and StakingRewards.sol and allows the owner to pause deposits in those contracts.

contracts/mocks contains mock contracts for unit tests which include methods for setting fake data in them.

We use the log and exp methods in the library ABDKMath64x64.sol to calculate the LS-LMSR cost function in OptionsMarketMaker.sol.

We use UniERC20.sol as a wrapper around ETH and ERC20 tokens for convenience. It's based on https://github.com/CryptoManiacsZone/mooniswap/blob/master/contracts/libraries/UniERC20.sol

Run solidity formatter

npm run lint:fix

Run python formatter on unit tests

black .

Run unit tests

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Compile

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