Yesterday, we covered Perps, including the current Perpetuals landscape, and some top projects in the Perps sector.
Today, we’re covering Options. Options, while less prevalent in crypto both in centralized and decentralized forms, provide some inherent advantages. UI improvements and education efforts are helpful when it comes to onboarding across crypto, but this rings especially true for the options space, which can contain complex strategies and configurations. Despite this, the options sector has seen significant growth over the past 8 to 12 months, along with the crypto markets in general as the total crypto marketcap recently passed $2T.In today’s edition, we’ll be focusing on Dopex, Cega, Premia, Rysk, and Panoptic…
Stay alert, stay informed ⬇
Dopex
Dopex, a prominent Options DEX on arbitrum, recently introduced its V2 CLAMM, which aims to bring ease to options trading with its natural liquidity hedge. Some big changes are actually underway at Dopex, as the project will be sunsetting its SSOV (single staking options vaults) product. February is actually the last month that this product will be available to use. Focus will instead be applied to the CLAMM.
Several upcoming changes have been teased with Dopex, including plans to customize and enhance the platform with new features and functionalities. This consists of customer liquidity and new hooks delivery. The team aims to improve liquidity through new partnerships and have surprises planned, highlighting the importance of portfolio margin for capital efficiency and attracting liquidity from both retail and professional sectors. There is also a focus on developing structured products to increase usage and liquidity.
Another recent development with Dopex is the upcoming launch of Orange Finance’s LPDfi vault (Liquidity Providing Derivatives). Orange Finance is an active liquidity management protocol. As options can be very complex, this sort of integration with Orange Finance seeks to abstract some complexity away for end users.
MarginZero is another project specifically built on top of Dopex, offering enticing features including:
0 upfront margin
Enhanced yield for LPs
Shared liquidity with Dopex
Upfront funding fee payments
0 price movement liquidations
Cega
Cega is a decentralized exotic derivatives protocol that generates yield and offers built-in protection against market downturns. It allows users to access specific types of strategies and provides off-chain leverage trading through a series of market makers. Cega works with market makers under ISDA (International Swaps and Derivatives Association) agreements, ensuring payment commitments and security. Cega notably transitioned from Solana to also deploy on Ethereum and Arbitrum, as Arbitrum has become a home-of-sorts for derivatives, specifically exotic derivatives.
The project was founded in 2019, by a team with experience, specifically in trading exotic options. Cega prides itself on offering higher fixed yields, downside protection, and transparency. Transparency is a key selling point of onchain options trading in general, as is self-custody, which is related. Users who want to trade crypto options on a CEX like Deribit have to accept that their funds can become opaque, and solvency may be uncertain at times.
Cega will be releasing a new product soon, based on their dual-currency investment strategy. This strategy allows users to earn higher yields on stablecoins, LSTs (liquid staking tokens), and $ETH. Other existing strategies on the platform include its Pure Options Fixed Coupon Notes, as well as its Bond + Options Fixed Coupon Notes.
Premia
Premia, an EVM decentralized options market based on its P2P options architecture and settlement engine, launched its Premia Blue version in Q3 2023. Premia Blue offers deep liquidity and accurate pricing by aggregating liquidity from various internal sources of liquidity. It also features a CLAMM, a limit orderbook, strategy vaults, and an RFQ (Request For Quote) network. The impact these additions have on capital efficiency and composability makes the protocol beneficial for a variety of users, including retail, passive LPs, active market makers, protail (pro-retail, trading firms, arbitrageurs, etc.), and more.
In the near future, Premia plans to release some UI upgrades, as simplifying the options trading UI can be challenging. More educational content will also be added to their academy, in addition to the pre-existing resources. A new product type is also slated to be announced soon, focusing on portfolio margin.
Rysk
Rysk is a feature-rich options protocol with an advanced UX for traders, generating uncorrelated and competitive yield in all market types for LPs. Rysk was started in 2022, focusing on providing an options AMM. The protocol also takes the approach of combining orderbook and AMM to attract market makers while offering complimentary products for hedging and portfolio management. The team expects the appetite for options from institutions to grow.
Rysk’s Dynamic Hedging Vaults (DHVs) aim to allow users to trade on-chain options with ease with tight bid and ask spreads, deep and capital-efficient concentrated liquidity, 1-click options strategies creation, and fast and cheap performance vis Arbitrum. DHVs can be used to minimize exposure and reduce directionality. Market neutral and uncorrelated returns are a key selling point of Rysk.
Rysk has also recently adjusted its ARB STIP distribution, raising the weekly grants pool for traders and LPs to ~5,800 and ~7,100 ARB, respectively until March 29th.
Panoptic
Panoptic is a perpetual (not to be confused with perpetuals, or perps) oracle-free options protocol built on Ethereum, currently in beta testing. Panoptic‘s approach simplifies market making and could mitigate liquidity fragmentation, thereby enhancing the adoption of DeFi options.
The protocol aims to provide accurate options pricing which is aligned with that of CEXs, taking advantage of the benefits that onchain listings for medium to long tail assets provide. Panoptic’s methodology offloads complexity to traders and uses Uniswap trading activity to dictate options pricing, making it easier to deploy markets and ensure fair pricing for buyers and sellers.
While the app is currently in its beta phase on various blockchains, Panoptic aims to completely launch in Q2 2024. Users will have the ability to buy and set options on any asset and the upcoming enhancements to their platform.
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