Features

Last updated 1 year ago

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Features

At SDX, we have devised a unique approach to address the challenges observed in the DeFi Option Space:

Automated Market Maker (AMM) Architecture: By implementing an AMM architecture, we eliminate the need for market makers to bootstrap an option market, thus reducing the upfront costs associated with securing market-making agreements for liquidity.
Better Risk-Adjusted Yield for LPs: Liquidity providers can expect improved risk-adjusted yields, as options will be sold at a premium relative to the calculated mark price.
Comprehensive Volatility Surface Quoting: Our AMM provides quotes across the entire volatility surface and option tenors, posting collateral only when a trade is matched. This is a marked improvement over CLOBs.
Alt-Coin Option Markets: Our dual asset pools with a long delta, short vega strategy inherently accommodate alt-coin option markets. This approach is similar to covered call/put selling vaults, enabling the bootstrapping of option markets by collateralizing and minting new options for sale. This feature caters to traders seeking convexity exposure on alt-coins like BONK and GMT.
No Bad Debt or Counter-party Risks: All options sold or purchased on SDX are fully collateralized using PsyOptions' Tokenized Euros Protocol, eliminating the risks of bad debt or socialized losses due to liquidation engine failure.
Support for Capital-Efficient Spread Strategies: Spread strategies on SDX require only the maximum potential loss as collateral, making it significantly more capital-efficient compared to posting individual collateral for both legs of the spread.
Automated Rebalancing: Dynamic bid-ask spreads adjust automatically to incentivize trades that rebalances the LP greeks to a target value. Capital utilization fees are charged to encourage capital-efficient trades, such as spread options and purchasing options from existing inventory.
Simple and Delightful UX: Taking inspiration from popular consumer applications, SDX creates a simple and delightful option trading experience, making crypto options accessible.

Last updated 1 year ago

Was this helpful?

At SDX, we have devised a unique approach to address the challenges observed in the DeFi Option Space:

Automated Market Maker (AMM) Architecture: By implementing an AMM architecture, we eliminate the need for market makers to bootstrap an option market, thus reducing the upfront costs associated with securing market-making agreements for liquidity.
Better Risk-Adjusted Yield for LPs: Liquidity providers can expect improved risk-adjusted yields, as options will be sold at a premium relative to the calculated mark price.
Comprehensive Volatility Surface Quoting: Our AMM provides quotes across the entire volatility surface and option tenors, posting collateral only when a trade is matched. This is a marked improvement over CLOBs.
Alt-Coin Option Markets: Our dual asset pools with a long delta, short vega strategy inherently accommodate alt-coin option markets. This approach is similar to covered call/put selling vaults, enabling the bootstrapping of option markets by collateralizing and minting new options for sale. This feature caters to traders seeking convexity exposure on alt-coins like BONK and GMT.
No Bad Debt or Counter-party Risks: All options sold or purchased on SDX are fully collateralized using PsyOptions' Tokenized Euros Protocol, eliminating the risks of bad debt or socialized losses due to liquidation engine failure.
Support for Capital-Efficient Spread Strategies: Spread strategies on SDX require only the maximum potential loss as collateral, making it significantly more capital-efficient compared to posting individual collateral for both legs of the spread.
Automated Rebalancing: Dynamic bid-ask spreads adjust automatically to incentivize trades that rebalances the LP greeks to a target value. Capital utilization fees are charged to encourage capital-efficient trades, such as spread options and purchasing options from existing inventory.
Simple and Delightful UX: Taking inspiration from popular consumer applications, SDX creates a simple and delightful option trading experience, making crypto options accessible.