An Explanation of DeFi Options Vaults (DOVs)

What are Defi options vaults (DOVs)?

The beauty of DOVs lies in its simplicity. Investors simply ‘stake’ their assets into vaults which deploy the assets into options strategies. Before DOVs, option strategies were only available to accredited investors through over-the-counter (OTC) trading or by self-execution on option exchanges like Deribit.

Why are DOVs a game-changer?

  1. DOVs bring high organic yield to Defi

A Quick Overview of Existing DOV protocols

Ribbon.Finance: First mover and successful proof-of-concept for DOVs. Built on Ethereum with close to $200 million TVL mostly in WBTC and ETH. They also offer AAVE, AVAX and STETH. Ribbon uses Opyn and Airswap for settlement and Gnosis for on-chain auctions.

Other Notable DOVs:

  1. Friktion.Finance — Offering SOL, BTC and ETH vaults. Planning vaults with convex structured products and also an impermanent loss hedge mechanism.
  2. Katana Finance
  3. Tap Finance
  1. Opium.Finance — Offering ETH and 1INCH vaults.
  2. SIREN Markets
  1. Arrow Markets — Offering bull and bear spread vaults. Also offering a unique price oracle for settlement written and hosted by the protocol.

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