Zeta Markets — Bringing Defi Options to Solana
This week’s Twitter Space interview focuses on one of the most notable Solana protocols — Zeta markets. Discover how Zeta’s founders, Tristan and Epsilon, navigated the world of Web3 to wind up building one of the biggest undercollateralized Defi platforms in the Solana ecosystem.
For those who might not be in the loop with the Solana community, can you give us an elevator pitch about who you guys are and what you guys are doing?
We’re building a super-fast, liquid, and capital efficient defi options platform. Our angle is that we want to emulate the trading experience people love from platforms like FTX, and we want to bring that to Defi. And integrating with the Serum Dex is a big part of our roadmap in getting there and bringing derivatives over to Defi.
If you aren’t familiar with options yet, they’re a really key financial primitive that you see a lot in TradFi. They’re a really good vehicle for leveraged coin speculation and hedging risk. We’re already seeing platforms like Robinhood offer options, but we want to take this a step further by making it truly Defi and permissionless so anyone can trade.
Could you walk us through the story behind how you guys connected and began collaborating on this project?
Most of us on the core team have been friends for many, many years. Everyone was working in their respective jobs right out of university, but we always kept in touch. We’d always be talking about the crypto markets and different trades we were making. It was always our dream to create our own algo-trading strategy.
We had been in crypto since 2017 and then this whole Defi thing started to come around. From there, we became interested in smart contract programming and decided we should take a look at this. The engineering side of building things really appealed to us, so we started building some Solidity protocols on the ETH blockchain.
We wrote up a whitepaper in a few weeks and began distributing it to people. We knew options hadn’t yet been done in the Defi space, so we know there was a big opportunity there. At that same time, the Solana Season Hackathon was approaching, so we enrolled. We built out our base protocol over that three-week period, won the hackathon, and have been adding to the product ever since.
Other than choosing Solana as your Layer 1, what decisions do you feel were important in building a decentralized options protocol like Zeta?
The reasons we landed on both Solana and Serum, and not just one or the other, is you want performance. You want the ability to provide live-time trading. But, most of all, the primitive that the order book unlocks in the form of Serum is something we think isn’t really available on any other chain. And it’s where we think Defi will eventually go.
The reason we chose Solana is that we can provide cheap, collateral-efficient trading because of the way we’re doing liquidations. We’re able to build an incredibly performant liquidation engine just because of how close the block times are. As a result, the trading experience we’re able to give is close to a TradFi or Zfi trading experience. This is all thanks to leveraging the battle-tested order book feature of Project Serum.
Slower chains like Ethereum wouldn’t be able to do that, and traders become very limited as to what they can do.
What do you feel most excited about right now in the Solana ecosystem?
There’s so many things to be excited about, and the space seems to be moving so quickly every week. There seem to be new protocols popping up all the time.
On our end, we’re keen to see our AMM or options market maker get out there. It’s pretty novel and it moves the AMM protocol to something much more sophisticated than what’s currently available — almost like an auto-trader on chain. We’re also excited to progress more along our own roadmap and eventually introduce some structured products which will allow for some really complex strategies that we think will be really cool and unlock a lot of value on top of options.
We’re also seeing the ecosystem start to boon on the NFT side with a lot of people coming over from Ethereum. Teams like Wormhole are also producing Defi bridges. It’s just a super exciting time to be in the Solana Defi space.
Helping Defi Reach Its Zenith
That’s a wrap on another week of the Project Serum Twitter Space interviews. What an insightful look into all the amazing things happening on Serum and in the digital economy as a whole. Thanks to brilliant people in the space like Tristan, Epsilon and their team, we’re seeing a new economy spawn right in front of our eyes.
Check out Zeta Markets here:
Check out Serum here: