Frequently asked questions
Optio is a decentralized options exchange that creates and trades new option markets with institutional-grade liquidity and capital efficiency, built on the StarkNet network.
What problems do we solve within decentralized options trading?
· Vault inflexibility - Weekly epochs and withdrawal holding periods
· Non-indicative yields - Vault yields are quoted on a historical basis, large discrepancies during volatile market conditions
· One size fits all strategies - Inability to service investor’s unique risk profile
· Limited coverage on long-tail asset - Inability to hedge or create structured products
· High slippage caused by shallow order book - Inability to support sizable orders as options premium deteriorates due to lack of depth
What are the “institutional grade” features of Optio?
· Volatility Based Matching Engine - Allows market makers to send orders in volatility terms instead of price only
· Delta Hedging System - Allows market makers to eliminate delta hedge slippage and be sure to trade options at the volatility level specified in their order
· Fair Distribution Model - Prevents a deep pocketed institution from locking out smaller liquidity providers and market makers
· Universal Liquidity Pool - Allows market makers to leverage on open orders which can automatically cancel or reduce orders that would become impossible to fully fill once a collateral consuming trade is made
We primarily serve market makers, investment managers, professional traders, and other institutional investors, while also being ready for retail use.
What types of options are we offering?
Currently, we are offering the European Call and European Put which means only can exercise the options at the expiration time.
What smart contract type are the options?
Instead of the regular smart contract, we develop a new ERC-1155 based standard for options on the StarkNet.
What is the oracle Optio using for price data?
The Optio Oracle is currently powered by Chainlink and is responsible for accurately determining derivative settlement prices and also assists computations pertinent to the Risk Based Collateral Engine.
Why did we choose StarkNet?
We want to have a better UX with Account Abstraction, which is natively implemented on StarkNet, furthermore, StarkNet is able to achieve NASDAQ-like TPS, while still retaining the security of Ethereum.StarkNet also enables developers to build applications with full trustlessness as well as privacy protection.
What is the general workflow of options trade on Optio?
1. Create an option order and wait for the counterparty. A ERC-1155 smart contract is minted and collateral is locked for this order.
2. Order is filled, option seller receives the premium from buyer. The seller shorts the ERC-1155 smart contract and the buyer longs the ERC-1155 smart contract.
3. The ERC-1155 smart contract holders can hold until expiration or make trades to exit before expiration
4. The functions inherent to the smart contract can settle the trade automatically which makes the proper payoff of long and short positions in the contract at the expiration time
5. Collateral is unlocked if no liquidation
What is the settlement on Optio?
Contracts will be automatically settled with Optio settlement function which will be called within an acceptable deviation from the contract-defined expiration time. Opio Admin can manually settle contract if it’s not settled automatically.
Who can take advantage of Optio?
Passive investors who want to enhance return or look for higher sustainable yieldMaker makers who want to have a better capital efficient by providing liquidityActive investors who want to hedge risk or speculate.
