Evolution of DeFi Options - TOKEN2049 Singapore 2022

yeah thanks everyone for coming to uh my talk today um as mentioned by by the moderators um I'm Julian I'm the CEO and co-founder ribbon which is the first and largest Structured Products protocol in D5 and we work a lot with like crypto options and I think we have a pretty good sense of where we think the industry is going so today in my presentation will be about how do we level up D5 options and how do we basically make this uh a much more popular product that people use so for a bit of context I mean we are we all in a bear market now so I think people are feeding like crypto markets have sort of dried up but interestingly crypto options are still like growing very very fast so for example currently the open interest for eth options are like at their all-time high uh which is like kind of crazy to think about because uh compared to e Futures which is like the the bread and butter of crypto trading that is down more than 50 from the all-time high so eth options relatively are just growing growing much faster than the whole Market um and we can even see more uh clues of why we think this industry is going so quickly for example a lot of the top five exchanges in the world are launching new types of options offerings so by bit okay x a bunch of these exchanges and every single trading firm if you speak to them they they would have set up like an options trading desk or or if they hadn't yet in the last 12 months so we think everyone is sort of gearing up for for this explosion and crypto options and uh yeah I think it will be a very big Trend in the next 12 to 24 months however we think although there is a lot of growth in all these options products we think this hasn't really reflected the same in the D5 world so for example um the first D5 options protocols came out in 2020 um but to be honest like they they really didn't get the same product Market fit or the same scale as some of these like uh centralized crypto uh centralized options exchanges so I think in the year of 2020 like the first year of options in D5 like the total tvl the whole category was less than 10 million dollars and the cumulative trading volume of like the all the options protocols combined was less than 100 Mil so that that is like really a drop in the bucket for for any of these derivatives but I think that really really changed last year when uh ribbon basically figured out like a way to package these like options contracts into these type of retail Vault structures that D5 users like are very very familiar with so so this is now what is known as the Dov which is like a D5 option fault which really takes all these options contracts packages it into like a D5 yield product and lets retail users use it so over the last year um after we launched I think there's been like a crazy growth in D5 options so uh in the last one and a half years we have done over 10 billion dollars of notional billion which is quite a lot and uh the total tvl of like the option space in D5 has basically gone from like 10 million to 500 plus so uh really I think a lot of growth has just come from these dobs um and in 2021 uh more than 90 plus percent of all like the on-chain options volume came from these vaults uh we think that that's going to continue and and we think that's like uh one of the biggest drivers of of option growth in D5 however although these dovs are like really nice and they really solve this like product Market fit thing for defy uh we think they are not like the terminal state for what options we look like so today these dobs let users sell options once a week to generate some sort of yield but this is like really restrictive really rigid if you're like a pro Trader you you want to control your positions you don't want to let like an automated strategy do something for you um so yeah I think these these vaults are like amazing for retail users but no serious Trader or Pro user wanna wants to use these dobs on like any meaningful scale so yeah I think overall dobs are too simple too simple and inflexible for the serious Trader um so today we are very excited to introduce our new product which is called Avo which is a Next Generation options exchange and and we think this is going to be uh the killer product of D5 options and this is going to be like the best place in crypto to trade crypto options um so a little bit of context about what it is uh this is as I mentioned like a high performance order book based exchange we think all these teams have tried like amm option emms all these pool star models but none of them really work very well so we think to attract the real institutional money you know like the Genesis of the world and like the biggest trading shops you actually need to build like an audiobook um so we've been working on this for the last six months and we built the whole Autobook based options exchange from the ground up um so as you can expect for for us to to attract sort of professional Traders we need to have like a really really robust margining system most of D5 is like over collateralized and that's like completely unacceptable for like Pro Traders so we built like a whole new margin system from the ground up it includes features like portfolio margin um we offered daily weekly monthly quality options which sort of gives users the choice in what they want to trade so this definitely feels much more like a pro exchange and finally for us to achieve all these goals we had to build it on like a custom roll up which was really designed for scale so we we really sort of built the whole stack uh from the ground up even like at the chain level um we think that as I mentioned before the goal that we're trying to go after is becoming the number one venue to trade options on chain um so we think the the three big points that we are going to have on day one is we're gonna have sort of over a hundred different instruments for users to start trading uh we're gonna have the deepest liquidity of any options platform on chain uh We've partnered with a lot of big trading firms to sort of make sure that happens and we think we're gonna also offer instant onboarding which means you can bring on uscc from any evm chain and start trading immediately so we think the combination of these three factors really creates a killer experience for trading options on chain finally which is what we think is like our unfair advantage and why we want to do this is because right now as I mentioned before ribbon dovs sort of Drive most of the on-chain options volumes and what that really means is like we control the flow of of who who trains options on chain and what we are going to do here is we're already going to integrate these volts with an exchange and Channel all this flow back into our own exchange so that's how we think we can really basically bootstrap this Marketplace and get people trading we already have all these flow from uh these vaults and we just sort of funnel it back to our own exchange and um we hope that you know if we build like a good enough liquidity mode in the next few years or in the next 12 months we think you'll be very very compelling for you know other dovs like all our competitors we think it'll be very possible that they want to build on us because we have the best liquidity so that is what we've been working on for the last six months um we think this is going to be like the killer app of crypto options um so yeah if you guys are interested in following the progress go to avo.xyz which is our website our landing page and uh we'll be posting more of these there uh we'll be opening this in by the end of the year and we are doing like a private um private mainnet launch in October so follow us on on Twitter uh meet me afterwards if you're interested in using the platform or if you're a trading firm who wants to get plugged in um will be around thank you very much