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Decentralized Options Market: Challenges and Opportunities Coexist, New Blue Ocean of DeFi Awaiting Exploration
Exploring the Development and Prospects of the Decentralization Options Market
Decentralization Options is a type of smart contract with options attributes issued on the blockchain. Compared to traditional options, it has advantages such as permissionless access, transparency, and no default risk, allowing for better integration with other decentralized products.
Since the DeFi boom in 2020, the decentralized options market has experienced rapid development. Currently, it has formed a pattern of classic options centered around BTC and ETH, as well as various ERC20 token options and exotic options. However, compared to traditional markets, the on-chain options scale is still very small.
The main challenges facing decentralized options include:
High cost: including operating expenses, risk costs, and education costs.
The market is immature: there is a lack of stable demand and insufficient liquidity.
Low capital efficiency: requires over-collateralization.
Inadequate infrastructure: Wallets, exchanges, etc. still need improvement.
The main projects in the market include:
Lyra: Adopts a liquidity pool model, splitting options risk into Delta and Vega risks for separate management.
Deri: Similar to Lyra, adopts DPMM pricing model.
Optix: Allows multiple independent funds to compete for quotes.
Premia: Balances automated market making and professional market making.
Aevo: A hybrid exchange on the Layer 2 network.
Y2K Finance: Binary options for stablecoin depegging.
Opyn: Innovative perpetual Options product.
In addition, some structured products based on Options have emerged, such as Ribbon Finance and Cega.
The future development directions may include:
Further improve capital efficiency and pricing accuracy.
Develop more products that integrate with the on-chain ecosystem.
Explore the application of Options in risk management, financing, and other areas.
Combine with emerging fields such as RWA and Layer 2.
Overall, the decentralized options market is still in its early stages, but with the improvement of infrastructure and the advancement of innovation, it is expected to become an indispensable part of the DeFi ecosystem in the future.