Decentralised exchanges (DEX) are a type of cryptocurrency exchanges which allows for direct peer-to-peer cryptocurrency transactions to take place online securely and without the need for an intermediary.
Decentralised Exchange employs a set smart contracts that self-execute under pre-determined conditions. Transactions on DEX are directly recorded and settled on the blockchain.
DBOE is an unique DEX and they pride themselves to be the leading Decentralised Exchange in the Option space by offering a simple but unique and safe Options trading and clearing to the crypto user community.
DBOE also marries the deep liquidity and efficient pricing of a centralized order book, with defi infrastructure that allows traders to operate their own defi wallet of choice for maximum security and low transaction fees.
Cryptocurrencies are worth an aggregate US$2 trillion today, and the derivatives market on this new asset class is just starting to take shape. While crypto futures contracts on centralized exchanges are well-established, the crypto community has yet to settle on a good options product and trading venue for a few reasons.
This is the single largest determinant of crypto options prices, can be an entire order of magnitude larger than that of traditional asset classes like equities and fixed income. This makes crypto options notoriously difficult to price and even riskier to trade.
High volatility also makes the risk of crypto options positions challenging for exchanges to manage, and many exchanges have no choice but to heavily cap leverage, set high margins, and even disallow the selling of options. These restrictions distort the prices of options leading to higher volatility risk premiums.
Instead of listing vanilla puts and calls that can result in unlimited losses for traders, DBOE lists simple bull and bear spreads with capped payoff structures. This allows DBOE to keep margins at a sane level which provides up to 5x capital efficiency for options sellers while limiting potential losses. Options buyers face zero counterparty and default risks because short options positions are still fully collateralized. DBOE also marries the deep liquidity and efficient pricing of a centralized order book, with defi infrastructure that allows traders to operate their own defi wallet of choice for maximum security and low transaction fees.
DBOE - “the leading DEX in options market”
Users have the flexibility to choose protection range
Collateral requires is capped by the distance of the two strikes i.e. K and Kc
Regular options can be easily constructed
No clearing risk
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