We are very excited to announce our investment in Opyn, a decentralized options marketplace.
If you invest in ETH (or just follow it), you’re used to prices going up and down. Opyn lets you protect your DeFi deposits and hedge ETH risk. The platform allows you to purchase put and call options on the price of different cryptocurrencies. Right now, Opyn works with ETH, but additional cryptocurrencies will be supported soon.
Put options are currently supported for ETH prices of between $180 and $240. This means that users who purchase put options have the right to redeem puts at the respective strike price at any time before the expiration date. Opyn also just introduced call options and is currently offering an option with a strike price of $250.
These options are created as oTokens and are immediately liquid. We’re already seeing a secondary market emerge on DEXs like Uniswap, as people are buying and selling the puts as the strike price gets closer to (or further from) the market price.
Protective puts have long been a common strategy for traders to limit their exposure to risk in a market, and Opyn gives DeFi enthusiasts a way to protect themselves from financial risks like crashes in ETH value and technical risks like hacks.
BUT even more importantly, because Opyn’s platform is open and generalizable, we believe it can become one of those core primitives or “money legos” for DeFi. Some potential use cases include:
- Hedging for ETH and other token miners
- Insurance that can cover both smart contract and financial risk
- A decentralized derivatives market for traders (which represents the largest market in traditional finance by orders of magnitude)
We continue to be incredibly impressed by the team’s product instincts and speed to ship and are proud to be partners on their journey to build a critical piece of financial infrastructure for p2p finance.
You can learn more about Opyn at https://opyn.co and @opyn_.