How Opyn works

Opyn is a generalized options protocol that allows DeFi users to create call and put options, as well as an easy-to-use options marketplace. Opyn V1 enabled the creation of any option market through through its Option factory contract. This contract allowed anyone to create an options market for any whitelisted asset with a specific strike price and expiry date. Each options market is defined by a oToken which is a tokenized ERC-20 asset of an options contract. These tokens can be minted by those who sell options by locking up collateral for a period of time. Opyn V2 released European, cash-settled options that auto-exercise upon expiry. The V2 enhancements focused on improving capital efficiency by introducing spreads that allow long oTokens to collateralize short oTokens. Opyn also integrated with the 0x decentralized exchange where oTokens are primarily traded. Lastly, a new V2 feature was the introduction of limit orders that allows traders to buy and sell options at a specific market price.

How Opyn makes money

At the moment, Opyn does not charge any protocol fees. Its services are provided free of charge for users. Users only have to pay a 0x protocol fee when they buy or sell options.

How you make money on Opyn

You can deposit whitelisted assets into Opyn to create call and put options to hedge or leverage your positions. You can also deposit assets to mint oTokens and sell to users to earn options premiums.