PsyOptions and Zeta Markets partner to bring Delta Neutral Vaults to Solana

TLDR

• PsyOptions has introduced a market making vault that generates returns for its depositors by acting as a market maker for PsyFinance option markets.
• The Zeta DEX provides a liquid decentralised marketplace with Serum’s on chain order book for PsyOptions to efficiently trade the delta neutral strategy as required.

The Solana ecosystem has been on a wild ride over the past few weeks, but we’ve been quietly building through the storm, and today we’re ready to announce that PsyOptions and Zeta Markets have teamed up to ship a new class of structured products on Solana.

Since inception, both our teams have shared the same important goal: to democratize derivatives trading for the masses. As we ship new products together, we hope to grow the pie for everyone and empower more end users with the ability to safely earn sustainable yield and hedge against risk in DeFi.

Delta Neutral Option Vaults

In order to generate yield on deposits, DeFi Option Vaults usually auction options to a range of counterparties every week. For PsyOptions, bidding on these auctions is open to everyone. But that’s not always the case in DeFi.

This new Delta Neutral vault will accept USDC as a deposit asset and generate returns by acting as a market maker for Defi Option Vaults on Solana. Its mandate is to sell any purchased options at a profit on Zeta Markets order books.

The end result is a Market Making Vault that will effectively generate risk limited and delta neutral returns for depositors.

For more information about the vault strategy, check out the docs here.

Why Is a Great Step Forward for DeFi on Solana

Besides the awesomeness of two former competitors and Solana hackathon winners teaming up to drive the growth of on-chain derivatives, there are a number of benefits for both protocols. For new vault depositors, the market making vault will aim to generate delta neutral (limited risk) returns. For existing vault depositors, the market making vault will act as a reserve to guarantee higher pricing for the options sold through the vault auctions. Zeta benefits from increased trading volume on the platform.

“DeFi option vaults have historically only allowed depositors to sell options. This new generation of vaults will allow you to participate in both sides of the trade” — Adrian from Zeta Markets

What’s Next?

The Market Making vault is now live here and will close at 200k USDC deposits. This vault is just the beginning. Be on the lookout for new vault strategies that integrate Zeta in the near future.

Stay in touch!

PsyOptions: Discord

PsyOptions: Twitter

Zeta: Discord

Zeta: Twitter