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Decentralized Option Trading: How Do They Get This Volume?

The gross value of derivatives market was valued at around 12.4 trillion in 2021. BTC option volume peaked at

35 billion at the same time. This definitely suggests that options market for crypto has a lot of market share to grab

šŸ§µA thread on decentralized option tradingšŸ§µ

DeFi option trading has undergone a significant transformation. On-chain option protocols account for 1 billion in TVL. Protocols such as @ribbonfinance @dopex_io @opyn_ have done well in user adoption and retention.

Such types of DeFi protocols operate on different models. These includes:

1. Option AMM (pretty much similar to the DEX AMM model) 2. Decentralized Option Vaults (based on order-book mechanism) 3. Perpetual Option (based on Uniswap v3 LP)

Overall, there's a massive difference between the options volume of cryptocurrencies compared to equity markets. This presents a huge market opportunity for these DeFi protocols. Also, with everything going wrong for CEXs, we can expect this volume to shift to these protocols.

To know more about Decentralized Option Trading Protocols:

blockchain cryptocurrency DeFi Optiontrading Derivatives PerpetualSwaps

Why Decentralized Option Protocols can boom in 2023?
This post is based on this twitter thread.


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