Opium Network consists of two main components: Opium Exchange, a decentralized derivatives exchange, and Opium Finance, a DeFi insurance business. Opium Finance operates through the creation of staking pools and the tokenization of insurance policies.

The Opium protocol acts as a smart escrow, allowing two parties to create a trustless contract and hold an asset until the contract terms are fully or partially fulfilled. It is particularly useful when there is uncertainty about one party's ability to fulfill their obligations or when the transaction depends on the outcome of a future event. An escrow accepts an asset based on a rule and releases it at a specified time based on another rule, which is determined by an oracle. The oracle communicates whether the desired event has occurred or provides relevant numerical data, triggering the execution of the transaction.

Let's take a simple example to understand how an escrow works. Suppose you want to hire a freelancer to complete certain tasks. Both parties agree on parameters such as scope, deadline, and remuneration, and create an escrow. The hiring party deposits the required funds. After the deadline, an oracle reports the amount of work completed. Depending on the completion level, the escrow will release either a percentage or the full sum to the freelancer.

Creating an escrow or safe does not require any technical knowledge. Once created, the escrow will function autonomously according to its programmed rules. Other users interested in entering a contract with the same parameters can use the existing escrow. Each contract is made between two parties, ensuring that the agreements of other users are not affected.

Opium is a new platform for launching and trading cryptocurrency derivatives.

Having begun operations in May 2020, Opium uses Ethereum to run a decentralized derivatives marketplace in which any cryptocurrency owner can participate.

The aim of the platform is to democratize access to financial derivatives while using the benefits that decentralization affords traders over legacy alternatives.

Opiums in-house token, OPIUM, launched in January 2021 and will fulfil various roles mostly centered around platform governance. Active users will be able to vote on some of the most important decisions involved in the platforms operations.

Opium has a team involved in the creation of decentralized finance (DeFi) tools since 2017. These include three products built on top of the Opium protocol.

The platforms CEO and co-founder is Andrey Belyakov. A member of the Chartered Financial Analyst (CFA) Institute, Belyakovs experience lies in the professional derivative trading and fund management sectors, in which he has over 20 years experience with assets under management portfolios of €20 million and over. He has been involved in the cryptocurrency sector since 2015.

Arjan van der Kooij, Opiums second co-founder, is a Dutch entrepreneur and private investor with a focus in IT and technology startups.

Opium in its official whitepaper states that it aims to become the Bloomberg of decentralized derivatives.

Built on the Ethereum network, its platform allows anyone with a wallet to begin trading crypto derivatives and build and launch associated contracts.

Begun before the DeFi movement appeared, a longer-term strategy has always been to attract traders away from traditional derivatives platforms. When the first Bitcoin (BTC) derivatives launched in the form of futures in late 2017, the floodgates were opened, but it took a long time for genuine interest to soar and for derivatives to become part of the cryptocurrency landscape. Opium intends to speed up the process by democratizing entry.

Trades on the Opium platform attract an optional derivative fee, which if implemented sees 90% go to the creator and 10% retained by Opium.

Future plans include the launch of a V2 exchange, as well as so-called Layer 2 functionality which will decrease the likelihood of users facing losses when Ethereum gas fees become overly high.

The in-house token of Opium is OPIUM. Built as an ERC-20 token on Ethereum, OPIUM will be released according to a specific roadmap after launch.

Out of a total supply of 100 million, 60% of the tokens will go towards an active users fund, with users themselves deciding how many tokens will be available for release at set intervals. Users will also decide on what level of engagement constitutes being active.

Another 16% of the supply will go towards investors and advisors with a broad two-year vesting schedule.

The remaining 24% will be split — 14% will go to the Opium team, while 10% will form a so-called Governance Reserve Fund, once again under the control of users via decentralized autonomous organization (DAO).

Opium completed a professional independent audit of its operations using SmartDec, the results of which are publicly available online.

SmartDec offers a disclaimer that a single audit is not enough to be entirely certain of the security Opiums code.

For everyday users, standard risks include those involved with derivatives more broadly. Without due diligence and a suitable strategy, it is possible to lose large amounts of money very quickly during times of market volatility.

BYDFi has a dedicated introduction to crypto derivatives which offers more information.

OPIUM is not yet freely tradeable as of the time of writing this page (January 2021), as distribution has only just started. As of Jan. 28, 2021, OPIUM is available on Zerion. This situation will soon change and the information will be updated as the token becomes supported by more exchanges.

If youre still a cryptocurrency newbie, read our easy guide to buying Bitcoin or any other cryptocurrency.