- Ethereum: Ribbon Finance has just released Aevo, which it says is a “high-performance” options exchange.
- Options are financial contracts that allow traders to buy (“call”) or sell (“put”) an asset.
- The first version will only accept Ethereum but in coming months, Bitcoin and other cryptocurrencies should be added.
Ethereum options is possible through Ribbon Finance’s exchange. The launch is the latest in a line of structured financial products.
The market for crypto derivatives is getting hot.
Ribbon Finance has just released Aevo, which it says is a “high-performance” options exchange. Built on Ethereum, the first version will only accept ETH, but in the coming months, Bitcoin and other cryptocurrencies should be added.
The base of the platform is a “custom “The Ribbon team built Ethereum rollup, which Julian Koh, co-founder and CEO of Ribbon, calls “a fork of Optimism with changes for Ribbon’s use case.” Koh told Decrypt in an email that Aevo will have “deep liquidity” at launch thanks to partnerships with market makers that focus on fiver options.
Options are financial contracts that allow traders to buy (“call”) or sell (“put”) an asset at a certain date and price. They are often used to protect against risk because they can guarantee a price for an asset.
Ribbon’s decision to start an options exchange is also in line with what it has done in the past. Theta Vaults, which is probably the most well-known part of the project, uses an automated options strategy to help users make money. For example, right now users can put the stablecoin USDC into the T-USDC-P-ETH vault, which uses a put-selling strategy for Ethereum.
The same thing will happen with these vaults and Aevo. “The vaults will be built on top of the exchange,” Koh said. “This will give users a lot more freedom in choosing their positions or protecting them.”
Ribbon has also released Ribbon Earn and Ribbon Lend, which, as their names suggest, let users earn and lend cryptocurrencies.
The loans made through Lend are important because they are not backed by collateral and are given to market makers who have gone through KYC and AML procedures.
Koh thinks that when the platform goes live, it will bring in up to $100 million per day. But he bases this big guess on the platform’s volume numbers from May, before the crypto market crashed, when the vaults were processing $50 million a day.
“We can generate significantly more volume,” Koh said, “by enabling traders to do much more than just sell options once a week.”