Zeta Markets ζ
Zeta is revolutionizing options trading on DeFi, enabling anyone to effectively hedge risk against crypto market movement and events.
Our value proposition:
- Hybrid orderbook and options AMM model (automated market maker) that allows for efficient pricing and deep liquidity
- Greater capital efficiency via under-collateralization
- Lightning fast transactions and low fees (thanks to Solana)
- A strong focus on the user experience with easy-to-trade derivative products and exciting underlyings that appeal to the you, the pioneers of DeFi
Decentralized finance has grown exponentially in the past year from 900M last May to 90B total value locked (TVL) at the time of writing, a whopping 100x in growth 🚀🚀🚀. DeFi has opened up the door for digital asset investors to safely trade, store, and earn on their digital assets without the intervention of a trusted central counterparty. With new advancements like automated market-making (AMM) pools, lending platforms, and asset staking hitting the market — investors now, more than ever, need effective ways to hedge their risk.
Financial derivatives (futures & options) are a tried and tested means to safeguard assets and enhance returns — traders are able to access leverage, portfolio managers can cover black-swan risks, and producers are able to lock in their income streams. Despite the wild popularity of perpetual futures on platforms like FTX (accounting for 10x the volume of spot trading), why aren’t options more actively utilized on DeFi?
- 💰 Costs
Current on-chain protocols are prohibited by the expensive nature of their transactions, meaning investors have an additional hurdle in fees and timeliness to execute their transactions.
- 📉 Poor AMM profitability
Although AMMs are able to reasonably provide spot liquidity — futures and options are slightly more complex to price and trade, meaning no liquidity pool has been able to both attract significant TVL and remain profitable.
- 🏛 Huge collateral obligations
Current DeFi derivative platforms haven’t been able to address the fact that options have unbounded payoffs without asking users to fully collateralise. This significantly affects an investor’s capital efficiency, increasing the implicit costs of trading options.
- 💧 Liquidity issues
Because of the concerns above, a liquidity stalemate occurs. Nobody wants to trade because it’s too expensive, and nobody wants to provide liquidity because it’s too risky!
Vision & Innovation
Zeta addresses these gaps in the current DeFi landscape — building a sub-second speed options protocol on the Solana network, with an AMM designed to provide liquidity for traders, and long-term yield to investors.
Our goal is to provide a platform where traders aren’t sacrificing ease of access, capital efficiency or liquidity, and instead have a professional-grade platform to trade derivatives on a number of crypto-centric underlyings.
We are providing innovation on several fronts:
- ⚡ Speed and Efficiency
Building a derivatives protocol on Solana provides traders the ability to trade at lightning speed on the Serum orderbook with almost zero cost, unlike current platforms which rack up hundreds of dollars in fees and take minutes just to clear orders.
- 📈 Liquid Markets
Zeta’s proposed AMM will provide superior yields to LPs, as well as encourage liquidity by making markets on every product we list. We employ a dynamic AMM which takes in information from every trade in the market to determine a fair option value, responding in the same way a ‘real’ market maker would. This allows for infinite horizontal scalability to any tail liquidity tokens and strikes.
- ⚖ Under-collateralization
Collateral is significantly reduced on Zeta’s options platform. We recognise that options in conjunction are often less risky than standalone, and actively reduce trader’s required collateral for spreads, strangles, straddles, flies and more.
- 🔥 Novel Derivatives
Most of all, we want to provide products that real crypto natives care about. We will be looking to list not only derivatives on spot prices, but derivatives on blockchain information, gas fees, funding rates and more — with community feedback at every step.
The Road Ahead
- Everlasting options 👀
- Volatility surface API
- Perpetual futures
We can’t begin to describe how excited we are to embark on this journey with you all. Stay in touch with our progress and join the next wave of DeFi innovation by checking out our website, joining the Zeta Discord and following @ZetaMarkets on Twitter.