Difference between revisions of "Dopex"

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(Created page with "Dopex is an on-chain options protocol, native to Arbitrum, but currently available on other blockchains (BNB Chain, Avalanche, Metis). The main feature of Dopex are SSOV (Single Staking Options Vaults), which allow exposure to Covered call and Cash-secured puts via selling on-chain options. Recently the protocol has added an OTC section which allows peer-to-peer options trading. ==SSOVs== Single staking options vaults are the main product offere...")
 
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==SSOVs==
==SSOVs==
[[File:Dopex SSOVs.png|thumb|500px |Dopex SSOVs on Arbitrum]]
Single staking options vaults are the main product offered by Dopex. They are, in fact, a vault in which a user can deposit funds to get exposed to covered calls and cash-secured puts strategies.
Single staking options vaults are the main product offered by Dopex. They are, in fact, a vault in which a user can deposit funds to get exposed to covered calls and cash-secured puts strategies.
The SSOV all use European options, which means the contract cannot be exercised before the expiring date.
The SSOV all use European options, which means the contract cannot be exercised before the expiring date.

Revision as of 14:18, 23 April 2022

Dopex is an on-chain options protocol, native to Arbitrum, but currently available on other blockchains (BNB Chain, Avalanche, Metis). The main feature of Dopex are SSOV (Single Staking Options Vaults), which allow exposure to Covered call and Cash-secured puts via selling on-chain options. Recently the protocol has added an OTC section which allows peer-to-peer options trading.

SSOVs

Dopex SSOVs on Arbitrum

Single staking options vaults are the main product offered by Dopex. They are, in fact, a vault in which a user can deposit funds to get exposed to covered calls and cash-secured puts strategies. The SSOV all use European options, which means the contract cannot be exercised before the expiring date.

Calls SSOV

A call option is a contract between two parts which gives the buyer the option (but not the obligation) to purchase a set quantity of a certain asset to the seller at a certain price called the strike price for a premium (payed by the buyer to the seller). This vault takes advantage of the covered call strategy, which consists of selling out of the money call options while at the same time holding the underlying asset. This allows, if the option expires out of the money, to earn the premium while staying exposed to the underlying collateral. By depositing assets into this vault (ex. ETH into the ETH Call SSOV) one limits the upside gains on the underlying while earning a yield from the premiums.

Puts SSOVs

A put option is a contract between two parts which gives the buyer the option (but not the obligation) to sell a set quantity of a certain asset to the seller at a certain price called the strike price for a premium (payed by the buyer to the seller). This vault takes advantage of the cash-secured put strategy, which consists of selling out of the money put options while at the same time holding cash (AKA stablecoins). This allows, if the option expires out of the money, to earn the premium while holding stables. By depositing stablecoins into this vault (ex. USDC into the ETH Put SSOV) one earns a yield on USD provided the underlying asset price does not go below the strike price

Since the introduction of SSOVs v3, multiple expiring timelines are possibile, allowing for monthly, weekly or even daily SSOV. It is also important to note that Dopex also offers protection from losses in the SSOVs. When SSOVs options expire in the money, part of the funds lost by the SSOV liquidity provider is paid back from the protocol in the form of rDPX tokens.