Exploring On-Chain Options Trading: 5 DeFi Protocols Worth Following

In the current uncertain cryptocurrency market, options trading is becoming an important tool for investors to manage risk. This article will introduce the basics of options trading and recommend 5 on-chain options protocols worth following, helping readers better understand and utilize this financial instrument.

Options Trading Introduction

Options are a type of financial derivative that gives the buyer the right, but not the obligation, to buy or sell the underlying asset at a predetermined price on a specific date. Options trading is mainly divided into two types: Call Options and Put Options.

• Call Options: gives the buyer the right to purchase an asset at an agreed price
• Put Options: Grant the buyer the right to sell an asset at an agreed price

The price of Options is influenced by various factors, including the underlying asset price, strike price, expiration time, volatility, etc. For Options traders, understanding basic knowledge such as the Black-Scholes pricing model is very important.

Options trading has the characteristic of unlimited upside potential and limited downside risk, which attracts different types of market participants. Whether it is speculators seeking high leveraged returns or conservative investors looking to hedge risks, they can utilize Options to achieve their investment goals.

5 On-chain Options Protocols Worth Following

( 1. Lyra

Lyra is an Options protocol deployed on Arbitrum, Optimism, and Ethereum, primarily offering Options trading for ETH and BTC. The protocol features a clean user interface, providing a variety of strike prices and expiration date options, and the bid-ask spreads are relatively small, offering good liquidity for traders.

Lyra is very suitable for experienced traders who wish to replicate the traditional brokerage experience. Currently, Lyra's total locked value ) TVL ( exceeds 29 million USD, evenly distributed across Optimism and Arbitrum.

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( 2. Hegic

Hegic is deployed on Arbitrum and Ethereum, providing Options trading for ETH and BTC. The protocol features customizable expiry dates and offers a range of one-click complex Options strategies.

Users can choose various bullish, bearish, high volatility, or low volatility strategies based on their risk preferences and market outlook. Hegic also provides interactive charts that visually present the return outcomes of different strategies under various market conditions.

Hegic is suitable for advanced users seeking flexible expiration dates and one-click complex Options strategies.

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) 3. Whiteheart

Whiteheart is a simple options protocol deployed on Ethereum, focused on providing "hedging contracts" for ETH and BTC. Users only need to select the asset type ###ETH or BTC( and the hedging days to lock in the current price, eliminating downside risk within the specified time.

Whiteheart's simple interface and intuitive operation make it an ideal choice for novice Options traders.

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( 4. Premia

Premia is a multi-chain deployed Options protocol that provides options trading for various low market cap assets such as YFI, LINK, and ALCX, in addition to ETH and BTC. The protocol supports customizable expiration dates and offers multiple strike price options.

The uniqueness of Premia lies in its Options pricing dashboard, which provides traders with reference information on whether the Options pricing is reasonable. The protocol adopts a pricing model similar to Black-Scholes but optimized to better suit the characteristics of crypto assets.

Premia is suitable for traders who wish to trade a variety of asset Options and gain an in-depth understanding of the Options pricing mechanism.

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) 5. Siren

Siren is an options protocol deployed on Polygon, providing options trading for various assets such as ETH, MATIC, and SUSHI. The protocol features a user interface design similar to traditional finance, offering a clear display of options on-chain.

Compared to Lyra, Siren offers a wider variety of underlying assets and a broader range of strike price options. It is suitable for experienced traders, especially those looking to trade Options on the Polygon network.

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Conclusion

With the development of the DeFi ecosystem, on-chain options protocols provide investors with more risk management and investment tools. Whether pursuing high returns or risk hedging, the above 5 protocols can meet the needs of different users. However, options trading still carries a high risk, and investors should fully understand the relevant knowledge before participating and operate cautiously according to their own situation.

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