on-chain perpetuals in defi have achieved sustainable PMF with users. Options are the most commonly used derivative in trad-fi where they are used as a tool for protecting positions and hedging against risks.
a 🧵, where we analyze on-chain options ecosystem
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@opyn_ on Ethereum is the biggest options protocol (TVL: 50M).
The main product is Squeeth (oSQTH):
a) When long, you buy oSQTH which is ETH². It offers unlimited upside with no liquidation risk.
b) When short oSQTH, you earn funding rate for providing collateralized ETH.
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There are other strategies on Opyn:
a) Crab Strategy: automated strategy that allows USDC depositers to earn by shorting Squeeth without taking a view on the price of ETH
b) Zen Bull: ETH deposit is split between the Crab strategy and a leveraged long ETH position.
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@lyrafinance on Optimism is an open protocol for trading options (TVL: 14M)
Lyra is a suite of smart contracts that create an automated market maker for trading options. Lyra users can buy/sell call, put options with expiry.
lyra.finance/
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@PolynomialFi offers automated option selling vaults to deliver passive yield. The vault weekly sells call and put options on Lyra Finance and uses synthetics (@synthetix_io).
Currently, they offer 3 vault strategies:
a) sETH-collateralized ETH call selling strategy
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b) sUSD-collateralized ETH put selling stratgey
c) sUSD-collateralized ETH call selling strategy
The team is vibrant and they have ambitious development plans to bring better synergies to their vaults.
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@Hegic is an on-chain peer-to-pool options trading protocol on Arbitrum (TVL: 6M).
There are various option strategies on Hegic for positional bets (bullish, bearish, high volatility and low volatility) on the ETH, BTC markets.
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@PremiaFinance is a fully-featured peer-to-pool options platform operating majorly on Arbitrum & Ethereum (TVL: 7M). Premia provides an AMM that uses pool pricing mechanism to deliver dynamic option pricing based on market supply and demand.
app.premia.finance/options
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Premia offers 2 major products:
a) Options Trading: Market driven pricing relative to supply and demand of capital within that pool.
b) Liquidity Pools: Liquidity sensitive returns to LPs, granularity in terms of control over markets LPs underwrite, Premia token rewards.
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@dopex_io is a decentralized options protocol currently operating on Arbitrum (TVL: 22M)
Dopex offers 2 products:
a) Single Staking Option Vaults: These are single token vaults with weekly/monthly expiry. Deposits are sold as call options to buyers at fixed strikes.
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b) Atlantic Straddle Vaults
Sharing a deep-dive into understanding Atlantic Straddle vaults by Dopex.
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twitter.com/eli5_defi/status/1571117064546553856
Options on-chain are still very nascent and have not had the kind of success that Perps have witnessed. It is yet to be seen if Options on-chain will get user traction/market fit in future.
Let me know about your viewpoints around Options and which platform do you use. 👋👋