Introducing the next generation of Polynomial Earn Vaults
Today, we’re excited to launch the next generation of Earn Vaults. 4 months ago Polynomial launched Earn Vaults, the first ever fully on-chain option vaults.
We’re live with sETH Call Selling and sETH Put Selling vaults on Optimism Mainnet. Head over to Earn App to secure your deposits.
💹 Introducing Dynamic Option Vaults
Polynomial Earn v1 was the first ever fully on-chain option vault that sold options directly to an AMM. With Earn v2 comes a lot of new features, let’s dive into it one by one.
⏳ Near-Instant Deposits and Withdrawals
Earn v1 vaults were designed around a round system, which meant that deposits and withdrawals were only processed during the end of the round. This resulted in delays for deposits and withdrawals, sometimes this meant users waiting up to a week. This is being changed in v2 vaults and introducing near-instant deposits and withdrawals. Almost all deposits/withdrawals will be processed within 4 hours.
🏦 ERC-20 Tokenized Vaults
To facilitate near-instant deposits and withdrawals, all vaults are now tokenized with corresponding ERC-20 tokens. Net Asset Value (NAV) of the vaults are calculated to price the vault tokens. These vaults tokens can be integrated into the rest of DeFi since the vault tokens act as a yield bearing asset on the deposit token, the possibilities are endless.
📚 Multiple Strikes across Multiple Expiries
Unlike v1, v2 vaults are able to trade multiple strikes from multiple expiries by capping risk at the same time. Design flow of v1 limited selling of more than one strike, this resulted in additional risk as the underlying price moved. In v2, the vault will be able to dynamically select different strikes as the underlying price moves in different direction. At the same time, there are on-chain restrictions which will limit the vault from selling risky options. Vaults are limited to selling options of delta less than 25.
🍰 Partial Collateralization
With Avalon release, Lyra introduced partial collateralization for on-chain options. Up until now, short option positions were fully collaterlized. With Earn v2 vaults, we will be able to take advantage of partial collateralization and make our vaults more capital efficient. Polynomial Earn will be first ever option vaults to implement partial collateralization. Partial collateralization will allow us to sell 1 call option with less than 1 underlying asset as collateral. Similarly we’ll be able to sell put options with less than strike price worth of sUSD as collateral.
With all these changes, Polynomial Earn Vaults are becoming more capital efficient and dynamic. We’re more than excited to lead the innovations in the space of option vaults.
As the vaults are experimental, both sETH Call Selling and sETH Put Selling vaults are capped with 600 sETH and 1M sUSD deposits respectively. As we build confidence in our vaults, we’ll be increasing the deposit caps progressively.
Smart contracts are nascent technology and are subject to risks associated with code. The contracts have been audited by Peckshield but users are advised to still use with caution.
⚡️ Earn app — https://earn.polynomial.fi
💬 Discord — https://discord.gg/polynomial
🌍 Website — https://polynomial.fi
📝 Docs — https://docs.earn.polynomial.fi
🐦 Twitter — https://twitter.com/polynomialFi/
