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Ribbon Finance, a decentralized finance (DeFi) protocol company well-known for its on-chain structured products, announced that it is opening an options exchange to increase demand among shrewd cryptocurrency traders for its services.
Aevo, which was unveiled at Token 2049 in Singapore, will initially only let users trade ether (ETH) options, with ambitions to add trading for bitcoin (BTC) and other tokens in the near future.
The inventor of Ribbon, Julian Koh, predicted that the options exchange will soon surpass $100 million in daily trading volume and noted that the Ethereum ecosystem had "gained momentum" following the Merge conference earlier this month.
Koh used the term "TVL," or the total value locked, to refer to the amount of cryptocurrency invested in DeFi projects. "With the majority of TVL in our platform coming from the Ethereum ecosystem, we have always regarded it as our home ground, and have strategically launched Aevo while the Ethereum network continues to build momentum after the Merge," Koh told CoinDesk.
As of Wednesday, Ribbon has almost $75 million worth of different cryptocurrencies locked. Although the value of the assets kept on its platform decreased as the general market collapsed, it held more than $300 million at its peak in May.
For its Decentralized Option Vaults (DOV) product, which enables users to create yield through a variety of techniques involving financial instruments like options, derivatives, and other fixed-rate crypto products, Ribbon is well-known in the cryptocurrency community.
Users receive over 25% in annual yields from the DOV for USD Coin (USDC) on Ribbon, compared to rates of less than 4% on lending protocols like Aave or Compound.
As previously said, the trading of cryptocurrency options has been a rare bright light in the bear market, increasing in popularity even as the price of cryptocurrencies fell. According to data, thus far in September, options products have been traded for about $10 billion.
Earlier this year, fund manager Darius Sit of QCP Capital dubbed options trading as the next growth engine in the cryptocurrency industry. He explained at the time that institutional investors were much more familiar with these products and were much more likely to use options to trade cryptocurrencies than specialized DeFi products.
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