Ribbon Finance To Tap Ethereum Interest with Options Exchange
DeFi protocol is cutting the proverbial ribbon on an options exchange it hopes will generate $100 million in daily volume despite frosty market conditions
Source: Shutterstock
key takeaways
- DeFi derivatives platform Ribbon Finance is hoping to build on the success of its previous product launches
- Ribbon said it aims to tap into the buzz surrounding ether post-merge
DeFi derivates platform Ribbon Finance announced the launch of its Ethereum-based options exchange Tuesday, allowing users to trade directly from their smart wallets.
Dubbed Aevo, the exchange’s executives are hoping to generate $100 million in daily volume within a six-month timeframe by encouraging traders to tap into more than 100 instruments with varying expirations.
That might be easier said than done considering crypto’s recent downturn and bear market cycle, which has all but sapped liquidity and sent retail investors fleeing for the exits.
Still, its founders are pinning their hopes on Ethereum’s post-merge honeymoon period, that might help warm investors around to an otherwise frosty period in the spot market.
As of September, the total trading volume for ether options has remained steady at roughly $11 billion across Deribit, OKx, Bit.com CME and Huobi. That’s down from around $15 billion seen in May, Glassnode data shows.
“With the majority of total value locked in our platform coming from the Ethereum ecosystem, we have always regarded it as our home ground,” Ribbon’s CEO Julian Koh said.
Aevo will initially start with ETH options and then launch BTC as well as other contracts in the following months, Ribbon said in a statement.
This isn’t Ribbon’s first product launch. The platform focuses on structured products — a category familiar in traditional finance but on the rise in DeFi — and says it invented the concept known as Decentralized Option Vaults (DOV) which allows users to generate yield through various predefined strategies.
Before the invention of DOVs, option strategies were previously only available to accredited investors through over-the-counter trading.
It also rolled out lending and earning products that offer users principle-protected yields designed to protect against losses in the underlying asset at maturity.
To date, Ribbon said its products have traded more than $6 billion in options volume while maintaining a presence on Ethereum, Avalanche, and Solana.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
