Deep dive moment: Felipe Argento, co-founder of Knoss, breaks down why options are still so hard to build in DeFi.
For years, he's given friends the same answer about crypto: "ETH to a million or zero."
Problem is, there's no trustless way to place that bet onchain. 🧵↓
1/ Spot ETH covers the million. Holding nothing covers the zero. Perps add leverage in one direction. None of it covers the "or."
Options do. Buy a call and a put at the same strike and you win if ETH moves hard either way. Sell the same pair and you get paid while it goes nowhere.
2/ In TradFi, options trade about 3x as many contracts as futures. Onchain, they barely register, because the math is hard to run trustlessly: implied volatility, volatility surfaces, and portfolio margin.
So builders either simplify the math and overcollateralize everything, or run it on a server users have to trust.
3/ Now Knoss will run that math on Cartesi, so every step can be reproduced and proven on Ethereum. Users will get the capital efficiency without the black box.
It's an exchange for options and perps, built the Ethereum way. Follow Knoss and catch up on more details here: https://x.com/knoss_xyz/status/2105638543477399621
Repost: https://x.com/cartesiproject/status/2107456162002260196
For years, he's given friends the same answer about crypto: "ETH to a million or zero."
Problem is, there's no trustless way to place that bet onchain. 🧵↓
1/ Spot ETH covers the million. Holding nothing covers the zero. Perps add leverage in one direction. None of it covers the "or."
Options do. Buy a call and a put at the same strike and you win if ETH moves hard either way. Sell the same pair and you get paid while it goes nowhere.
2/ In TradFi, options trade about 3x as many contracts as futures. Onchain, they barely register, because the math is hard to run trustlessly: implied volatility, volatility surfaces, and portfolio margin.
So builders either simplify the math and overcollateralize everything, or run it on a server users have to trust.
3/ Now Knoss will run that math on Cartesi, so every step can be reproduced and proven on Ethereum. Users will get the capital efficiency without the black box.
It's an exchange for options and perps, built the Ethereum way. Follow Knoss and catch up on more details here: https://x.com/knoss_xyz/status/2105638543477399621
Repost: https://x.com/cartesiproject/status/2107456162002260196