Opium Network includes Opium Exchange, decentralized derivatives exchange and Opium Fiance, DeFi insurance business. Its insurance business operates through the construction of staking pools and the tokenization of insurance policies.
The Opium protocol is a smart escrow that enables two parties to make a trustless contract and holds an asset on their behalf until contract terms are fully or partially fulfilled. It is used when two parties are in the process of completing a transaction, and there is uncertainty over whether one party will be able to fulfill their obligations or when the transaction depends on an outcome of a future event. A safe accepts an asset according to a rule and releases it in some time according to another rule that depends on an oracle. Oracle communicates to the escrow whether the desired event occurred or not or provides some numerical data and thus triggers the execution of the transaction.
A very simple example of how an escrow works would be hiring a freelancer to perform some tasks. Parties agree on parameters, such as scope, deadline and remuneration, and create a safe. A hiring party deposits money. After the deadline, an oracle reports how much work is done. Depending on how much work is completed, the safe will give the freelancer either a percentage or the full sum.
One doesn’t need any technical knowledge to create an escrow or safe; once created, a safe will work endlessly as programmed. Anyone interested in entering a contract with the same parameters can use the existing escrow. The contracts are always made between two people, and there is no risk to affect the agreements of other users.
