Calling all DeFi BUIDLers — we wanted to share some ideas for what you can build with Opyn! Opyn’s Convexity Protocol is the first generalizable options protocol on Ethereum and is great for protection and risk management applications :)
Learning Resources
Options are an incredibly versatile financial instrument — in fact you can create any financial payoff using just put and call options. Here are some great resources to get started with learning about options:
Ideas
Without further ado, on to the ideas!
Volatility Oracle
Using put and call options you can develop a volatility oracle like the VIX, which tracks volatility in traditional finance.
Hedging for Uniswap LPs
Uniswap LPs can help protect themselves against impermanent loss in ETH:Stablecoin pools using a put-call strangle. In Uniswap pools, impermanent loss can cause the ETH price in the pool to either be less than or greater than the actual ETH price. A put-call strangle allows LPs to hedge against this volatility on both sides (if ETH price goes up or down).
Constant Volatility AMM
Right now, most oTokens trade on Uniswap, however Uniswap is not great for LPs on certain assets because Uniswap assumes that the price of two assets will generally stay constant. Options are expected to depreciate in price at a constant called theta, and for out of the money options near expiry, theta approaches the entirety of the option’s value. At the option expiry, the option is worthless, and so would an LPs Uniswap pool deposits. For Uniswap LPs to contribute to such a pool, they are exposed to 100% impermanent loss. Opyn Co-Founder Zubin Koticha has been working on a solution to this problem in the form of a constant volatility AMM, which has yet to be built!
Insurance for DeFi projects
The stakes for DeFi are growing as more and more people are using these platforms. Opyn is able to protect users against technical and financial risks that DeFi platforms face, and with Opyn, anyone can create insurance markets, so you can spin up insurance markets for your favorite DeFi projects today! Check out this section of the documentation.
New Markets Interface
Anyone can create new series on Opyn, deploying options on assets like ETH, or creating protection for DeFi protocols by deploying options on assets like cDAI. Right now, this is only accessible through the smart contracts, but creating an interface to allow individuals to arbitrarily deploy markets would make it more accessible for anyone in the world to create an options market on any ERC20 on Ethereum.
Greeks Tracker
The Greeks are a set of metrics options traders often use when trading options. Right now, traders have to manually calculate the Greeks for any available Opyn options. A number of users have been excited about an interface that would allow them to see and compare Greeks across available options, track the greeks over time, and track option premiums over time.
0x Market Maker
Originally all oTokens were trading on Uniswap, which poses some challenges for trading options (more on this and potential solutions in #research on the Opyn discord!) Anton, the amazing developer behind Opyn Monitor built a 0x integration with Opyn. To build a strong liquid market for trading oTokens on 0x, there need to be market makers who can buy / sell oTokens. Here you could create a market making bot with strategies specific to market making options!
OTC oTokens Interface
To avoid slippage, a lot of large oToken users are looking for ways to conduct OTC trades for oTokens. You could facilitate this using 0x as a settlement layer, building a simple interface for parties to interact with eachother while preserving anonymity — this could be something similar to what Boxswap does for OTC NFT trading.
+Your amazing new idea
The possibilities with oTokens are limitless — we’re so excited to see what new ideas you’ll come up with! We’re happy to help at any time. You can find us on the Opyn discord.
Current Projects
For some inspiration you can check out some projects currently built on Opyn!
Opyn Monitor
Opyn Monitor is a powerful interface for users to keep track of their Opyn positions and engage in advanced trading. Opyn Monitor also supports call options on ETH and provides an options DEX on top of 0x.
SaveDAI
SaveDAI is an insured, yielding savings account built using Compound, DAI, and Opyn, by wrapping cDAI and ocDAI into a single ERC20 token.
Get started
We’re more than happy to brainstorm ideas and answer any questions :) You can find us on the Opyn discord and you can check out the documentation here.
