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Some notes on the options space
Retail traders prefer American options because it allows them to capitalize on the high volatility of the underlying asset. They’re buying options for speculative trading, not protecting their positions.
DeFi degens will always prefer American.
Retail traders prefer American options because it allows them to capitalize on the high volatility of the underlying asset. They’re buying options for speculative trading, not protecting their positions.
DeFi degens will always prefer American.
Opyn V2’s move to European options suggests pandering to institutions or individuals with large portfolios, who’re interacting with options almost exclusively to protect and to provide protection.
This has two implications:
1. Opyn V1 will continue being used by retail degens.
2. Hegic now has more space in the retail options space but
1. Opyn V1 will continue being used by retail degens.
2. Hegic now has more space in the retail options space but
current Hegic design does not favour LPs, TVL will decrease and options will only get more expensive until Hegic is able to create at least seemingly positive sum game for LPs and option buyers.
This is perhaps leaving room, at least temporarily, for an options protocol catered towards defi degens, that is able to attract option sellers by creating a fair game while giving degens the flexibility they tasted with Hegic, but at a price they can afford.
Opyn has this market in mind, but from a distance it seems as though it makes more sense for them to pander to high worth clients (focus on protection) so there’s liquidity and work their way downwards to retail.
