The DeFi options market is very young and cumulatively has less than $200m in total value locked. Over the past four months, a synergistic relationship has developed between Ribbon Finance, a structured product provider, and Opyn, an on-chain options protocol. These two protocols account for over $100 million in TVL and $90m worth of on-chain options volume weekly. This TVL and volume can be attributed mainly to Ribbon’s first line of products – the “Theta Vaults”.
Disclosure: Members of our team have farmed RBN. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token. This content is for informational purposes only, and you should not make decisions based solely on it. This is not investment advice.
Opyn & Ribbon account for over half of all on-chain options TVL. Ribbon’s Theta Vaults leverage Opyn to sell ~$90m worth of call and put options every week.
A good analogy would be that Ribbon is the Yearn to Opyn’s Curve. Ribbon’s unique products simplify what is typically an active experience, where users monitor positions and do several transactions per week, into a passive one.
Ribbon currently offers 4 different Theta Vaults, which are effectively short volatility with a directional bias on the crypto market. However, there are new vaults in the pipeline including – V2 Theta Vaults (short volatility), Delta Vaults (long volatility), and stETH integrations.
Ribbon has generated $600k of revenue over the past 4 months from a fixed withdrawal fee but plans to move towards a management and performance fee in the future. Recent growth was partially driven by a liquidity mining program that ran from June 16th-July 18th, and distributed 1% of RBN’s total supply to vault users (although the RBN token is not liquid yet).
Currently, Opyn doesn’t have a token or charge any fees although this may eventually change. Rather than compete with Ribbon, it looks like Opyn wants to attract more protocols like it to build on top of them.
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