Macauley Peterson

Ribbon DAO token holders have voted in favor of folding Ribbon Finance into the affiliated Aevo derivatives exchange, which <a href="https://blockworks.co/news/aevo-mainnet-launch">launched its mainnet in June</a>.



Under the proposal, the Ribbon Finance dapp will be moved under the Aevo domain, and Ribbon’s existing structured products will adopt Aevo’s visual identity.



The near-unanimous vote by 133 RBN token holders, which <a href="https://snapshot.org/#/rbn.eth/proposal/0x68cddae9c345383838357d5e61e0d07b2263ad541e40c4ae84de829ccee673e2">concluded</a> Tuesday, also authorizes a 1:1 token conversion from RBN to a new AEVO token, yet to be launched.



According to the <a href="https://gov.ribbon.finance/t/rgp-33-merge-ribbon-finance-into-aevo/709">proposal</a>, “Aevo will be converted into a DAO, allowing tokenholders to govern the options and perpetuals exchange, OTC, the existing structured products, and the Aevo L2 rollup itself.”



Blockworks Research analyst Ren Yu Kong <a href="https://app.blockworksresearch.com/assets/rbn/governance/22726">called</a> the proposal “a fantastic one for the RBN token and should greatly improve tokenomics, and &#8220;shininess&#8221; surrounding a new token.”



Ribbon currently runs 16 DeFi options vaults (DOVs) on Ethereum, with a share of revenues directed to RBN token holders who lock their tokens for a fixed period of time, and receive veRBN in return.



But the protocol has struggled to scale, prompting the team to pivot to Aevo, a non-custodial options and perpetual futures exchange built as a layer-2 rollup using the Optimism stack. This uses an off-chain order book familiar to traders on centralized exchanges.



Once enacted, veRBN can unlock their RBN tokens without penalty and migrate them, while vault revenue sharing will be stopped, pending a further proposal on AEVO tokenomics.



The protocol’s developers and investors all agreed to re-vest their own token allocations for an additional year as part of the process.



<h2 class="wp-block-heading">What’s in a name?</h2>



Most governance discussion on the project’s forum and Discord was favorable to the proposal, but some questioned the relative merits of the two brands.



“Aevo will get lost and confused with Aave and others,” wrote one community member on Discord. “Ribbon as a brand clearly stands out.”



The project’s community manager disagreed, calling the Ribbon brand a “limitation,” due to its “heavy baggage” —&nbsp;a reference to problems that emerged following the launch of the RBN token in 2021 after DeFi venture fund Divergence Ventures, a Ribbon investor, was <a href="https://thedefiant.io/drpc-launches-decentralized-rpc">found</a> to have <a href="https://app.blockworksresearch.com/glossary#sybil-attack">Sybil-attacked</a> the airdrop.



“Ribbon is our history, let us not make it our burden,” the community manager said.



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Ribbon Finance governance approves Aevo brand merger

The Singapore-based team of <a href="https://blockworks.co/tag/ribbon-finance">Ribbon Finance</a> officially opened its new product Aevo, a derivatives exchange, to the public today.&nbsp;



Aevo, which was <a href="https://blockworks.co/news/ribbon-finance-to-tap-ethereum-interest-with-options-exchange">first announced in September 2022</a>, has been in a “gated” phase since April, with users needing to hold an “exchange pass” NFT for access.



“Since releasing the gated mainnet approximately 2 months ago we saw over [$70 Million] trading volume and a high of [about $5 million] in daily open interest,” the Aevo team wrote in <a href="https://aevo.mirror.xyz/hV7VYkpk7caoYl2DbOFcSaZRRrK-8NeWqKczrgUff6k">a blog post</a>.



The mainnet is no longer limited to NFT holders, and the platform also began offering bitcoin perpetual futures and options in addition to ether derivatives.



Aevo’s user experience is much closer to that of centralized derivatives platforms such as <a href="https://blockworks.co/tag/deribit">Deribit</a> than has previously been available. Converting users from centralized exchanges to the dex is a major goal, Chief Technology Officer Ken Chan told Blockworks.



“The largest barriers to adoption is the conversion of a usual CEX user to a DEX user,” Chan said, asking rhetorically, “How can we make it as easy as possible for a user that has not used Metamask to perform a trade on our exchange?”



Although Ribbon and Aevo are developed by the same team, they opted for a new brand to differentiate it from Ribbon’s roots as a yield-generating platform.



“We intend to target audiences out of the usual [crypto Twitter] crowd for takers, and we intend to bring some of the structured products ideas we have built for Ribbon to become makers on the exchange,” Chan said, noting that Aevo has an all-new tech stack that doesn’t rely on Ribbon’s protocol in any way.



Aevo uses a layer-2 Ethereum optimistic rollup based on the OP Stack combined with a cloud-hosted sequencer operated by Conduit, a third-party infrastructure provider.



Onboarding consists of signing a transaction to enable trading and then bridging USDC from Ethereum mainnet using a fork of the Optimism Standard Bridge contract, according to its <a href="https://help.aevo.xyz/en/articles/7190795-layer-2-architecture">documentation</a>.



Trading occurs on an off-chain order book, but all trades are settled on the layer-2, making it non-custodial. Placing, editing and canceling trades are gasless, so they don’t require a wallet signature or the use of a dedicated network RPC. The result is a very straightforward process.



The tradeoff is censorship resistance, as the order book relies on a centralized cloud-hosted server.



“We are trying to serve the middle ground of traders who do not mind this compromise,” Chen said.



<a href="https://blockworks.co/tag/Derivatives">Derivatives</a> are a vital financial primitive, orders of magnitude larger than spot trading in most markets, but regulation of on-chain derivatives exchanges is still nascent. Global access to retail traders may not sit well with some financial regulators.



The Aevo front-end can be geoblocked in some jurisdictions, and the product&#8217;s Terms of Use will discourage the use of technical workarounds, Chan said.



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Aevo mainnet launch opens decentralized futures, options

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

<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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