Sebastian Sinclair

<div id="highlights-block_63340b716297e" class="highlights">
 <ul>
 <li>DeFi derivatives platform Ribbon Finance is hoping to build on the success of its previous product launches</li>
 <li>Ribbon said it aims to tap into the buzz surrounding ether post-merge</li>
 </ul>
 
</div>



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, <a href="https://studio.glassnode.com/metrics?a=ETH&amp;c=usd&amp;category=Volume&amp;m=derivatives.OptionsVolumeDailySum&amp;s=1619672493&amp;u=1631836799&amp;zoom=" target="_blank" rel="noreferrer noopener">Glassnode data shows</a>.



“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 <a href="https://ribbonfinance.medium.com/ribbonv2-f1e64f956692" target="_blank" rel="noreferrer noopener">Decentralized Option Vaults</a> (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.



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Ribbon Finance To Tap Ethereum Interest with Options Exchange

Macauley Peterson

<div id="highlights-block_629e3693694d1" class="highlights">
 <ul>
 <li>Ribbon DAO will issue $3 million of convertible bonds redeemable until December 4, 2022</li>
 <li>The bonds carry a maximum yield to maturity of 7%</li>
 </ul>
 
</div>



Two months after raising <a href="https://cms.blockworks.co/porter-finance-has-a-new-idea-to-help-daos-grow-defi-bonds/" target="_blank" rel="noreferrer noopener">its seed round</a>, DeFi upstart Porter Finance is bringing its first big idea to market.&nbsp;



The platform began offering convertible bonds for a DAO, on Monday, with Ribbon Finance’s DAO (decentralized autonomous organization) as its launch partner.



The convertible bonds — effectively zero-coupon bonds sold to investors seeking a fixed income — are secured by 50,000,000 RBN (Ribbon Finance&#8217;s native token) or about 16.1 RBN per bond, according to <a href="https://app.porter.finance/pdf/Ribbon%20DAO%20Prospectus.pdf" target="_blank" rel="noreferrer noopener">a prospectus</a>. That equates to about $15.2 million collateralized at 490%.



“This is a huge step forward for DAOs,” Jordan Meyer, Porter Finance founder, said in a statement, who called it “a completely new fundraising option for DAOs and a novel lending opportunity for investors.”



Ribbon DAO has around $170 million in assets under management via Ribbon Finance’s decentralized options vaults (DOV).



The Ribbon Finance protocol, operated via fully on-chain governance by Ribbon DAO, has generated about $4 million in revenues since October 2021, according to a statement.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Excited to be the first DAO/protocol to issue debt on-chain. This is a great way for protocols who have strong cash flows to raise money in a bear market without selling tokens 🎀 <a href="https://t.co/BlHIJ1IqF6">https://t.co/BlHIJ1IqF6</a>&mdash; Ribbon Finance (@ribbonfinance) <a href="https://twitter.com/ribbonfinance/status/1532573202659954688?ref_src=twsrc%5Etfw">June 3, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“Having consistent revenues, a large treasury, and strong execution history, Ribbon is the perfect example of a creditworthy DAO,” Meyer told Blockworks.



The prospectus notes Ribbon intends to use the net proceeds from sales of the bonds “for general purposes, including protocol-owned liquidity and bootstrapping the stablecoin supply in our covered call Fuse pool,” referring to a feature from Rari Capital that lets users borrow stablecoins against their Ribbon vault positions.



&#8220;This lets us collateralize our treasury RBN to raise cash today at a predictable rate,&#8221; a representative from Ribbon DAO told Blockworks.



<blockquote class="wp-block-quote">&#8220;We are willing to give lenders some equity upside in exchange for better interest rates.&#8221;</blockquote>



Meyer expects this initial bond offering will catalyze a flood of similar deals.



“We are working to help more DAOs raise using the product and adding new features based on their feedback,” Meyer said. “We now have a large inbound of DAOs looking to follow in Ribbon’s footsteps.”



This story was updated on June 6, 2022, at 7:00 pm E.T. with comments from Ribbon DAO.



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