Let's dive into FLO, the smart market making strategy that generates fees from Opyn Markets’ super concentrated perp liquidity pools 💧 Why we like FLO 🌊

FLO smart contracts LP dynamically across pools so users don’t have to manually rebalance LPs. Users can check fees received and withdraw when ready.
Users deposit an asset and FLO allocates capital across pools.

Perps have been a game-changer in crypto, but they've only scratched the surface of what's possible.

We're taking perps to the next level.

Imagine perps that can replicate complex strategies, hedge unique risks, and unlock new forms of capital efficiency.

Perps, redefined🚀 👪Meet the family:

Stable perps (0-perps)
Uniswap LP perps (0.5-perps)
Normal (linear) perps (1-perps)
Squared perps (2-perps, aka Squeeth)

Each has its strengths, but together? They're a powerhouse.

Crab and the Pierian liquidity spring

Today we look more deeply at the Crab strategy that is part of Opyn's Squeeth protocol and its upgraded iteration in Opyn's new soon-to-be-released protocol.

Crab is an active strategy made from a short 2-perpetual (also known as Squeeth) and a long 1-perpetual.

Crab is called Crab because it makes money when markets go sideways, like a Crab.

The payoff for Crab over a day looks like a rainbow: it makes the largest return if the market does not move at all. Crab has negative returns if the market moves too much up or down. What is a Crab made of?

Crab is made by selling a 2-perpetual (Squeeth) and buying a 1-perpetual (a normal perp). The combination gives a downward bending payoff with a maximum at the current price.

(in the diagram the current price is $3000)

Does somebody have a red flag? Because you just summoned THE BULL.

Terrible jokes aside, Opyn is pleased to announce its newest automated squeeth strategy: the Zen Bull 🧘‍♀️🐂

You’re going to want to read this 👇 The Zen Bull (🧘‍♀️🐂) is an automated squeeth strategy that gives depositors bull"ish" ETH exposure.

Unlike the crab strategy, which is a delta-neutral strategy that minimizes ETH price exposure (delta = 0), this strategy aims to track ETH price exposure 1:1 (delta = 1).

Did you know that Uniswap isn’t the only place you can buy or sell Squeeth?

Let’s chat 🧵 The Opyn marketing team has been blowing up your timeline with Crab v2 stuff (sorry–not sorry)!

Something we have not touched on much is the Crab auction. The Crab auction mechanism is one of the biggest changes from v1 to v2 🦀

🗣️ CRAB v2 EARLY ACCESS SIGNUP TODAY 🦀

Bypass the caps on crab v2!

FOR A LIMITED TIME crab v1 depositors will be able to sign up for early access for crab v2.

This will guarantee your spot in crab v2 right when it drops!

Everything you need to know 👇 What is crab v2?

Crab v2 aims to deliver better yield and larger caps! 😎

It does this by adjusting the way crab hedges, allowing more capacity & better hedge pricing!

• New Hedging Mechanism
• ETH or USDC Deposits
• Partial Fills of Hedges
• Variable Hedging Frequency

Automated covered call strategies have been taking off in DeFi recently, offering users 30% - 40%+ projected APY on ETH & BTC deposits.

Yesterday, @StakeDAOHQ hit capacity for its ETH & BTC Covered Call Vaults 📈

What are covered calls, and why is it a popular strategy? 🧵👇 A covered call is an options strategy used to generate yield when traders believe the underlying asset price is unlikely to rise above the strike price before the expiration date.

It's constructed by holding an asset (e.g. ETH) and then selling call options on that same asset

🧵Explaining BOTH Sides of an Options Trade..

Call = right to BUY an asset
Put = right to SELL an asset

However, there are buyers AND sellers of both calls and puts

Very simple explanation 🧠👇 Buy a call (bullish) - you expect the asset price to be above the strike price at expiration

Sell a call (bearish) - you expect the asset price to be below the strike price at expiration

Reason to buy a call = leverage, unlimited upside
Reason to sell a call = generate income

🦄 New @Uniswap options have been added to Opyn v1 @ v1.opyn.co! 🥳

$UNI July 30 $15 put
$UNI July 30 $25 call

v1 options are physically settled, American options, and users must exercise before expiration Reasons to BUY a PUT option:

If you are worried about the price of $UNI going down you can buy Put options to hedge.

When you buy an oToken, you get the right to sell $UNI at the strike price ($15) no matter what UNI's market price is. These oTokens cap your downside.

🥳 We're launching the first-ever partially collateralized options in DeFi TOMORROW!

Partial collateralization means you can use less collateral to sell options. In other words, partial collateralization allows you to sell MORE options and generate HIGHER yield.

Cheat sheet 👇 Partial collateralizaton applies to SELLING options. Traders sell options to generate yield from premiums.

Sell a Call if you expect the price of ETH to be BELOW the strike price at expiration

Sell a Put if you expect the price of ETH to be ABOVE the strike price at expiration

🏛️Excited to announce Opyn’s Developer Toolkit, a suite of resources to make it easier for developers to build options products in DeFi!

- Vesting call options
- Perpetual vault templates
- @Uniswap v3 option liquidity pool @OpethFinance
- Liquidation bot
medium.com/opyn/introduci… Vesting Call Options

Use Opyn v1 to create physically settled vesting options for DAOs to emulate options given to startup employees for equity.

H/t @Fubuloubu, who approached us with this idea!

Incentivize the best talent
Motivate long-term value creation
Align interests

This is the last Friday in history without partially collateralized options in DeFi 🍻

Tuesday, June 29 is going to be 🔥

Users who partially collateralize positions can sell more options and generate higher yield if options expire OTM.

https://twitter.com/opyn_/status/1407065064117579779

For calls, less than 1 underlying asset can be posted as collateral

(<1w 2400c with 1815 spot example)

1 ETH = 100% collateralized = sell 1 call option
1 ETH = 50% collateralized = sell 2 call options
1 ETH = 33.3% collateralized = sell 3 call options

Every Day Options: ITM vs. Profitable

Some new options traders can be confused about the difference between ITM and profitable. A lot of charts show 'breakeven' points, which suggest that an asset must reach the strike price for the trade to become profitable. Not true.

🧠👇 If you have an asset that is trading at $20 and you buy an option with an expiration date a few months down the road at a strike price of say $30 for $1, the asset does NOT have to reach $30 for you to make money.

1/ We’re excited to bring you a new series of ETH protection, allowing you to protect yourself if ETH falls to $150 or lower before April 24th, completely trustlessly at opyn.co! 2/ What does ETH protection give you?

- Security against ETH volatility and flash crashes
- The ability to safely manage your ETH business finances
- Peace of mind for new ETH holders

Available now to protect against ETH falling to $150 or below at opyn.co

1/ We’re excited to announce at we’re live on mainnet at opyn.co! For the first time you can protect your @compoundfinance deposits against both technical and financial risks at opyn.co. medium.com/opyn/opyn-laun… 2/ We’ve seen an incredible community grow in DeFi around platforms like @MakerDAO @compoundfinance which form the basis of an emerging financial system, but users are facing substantial risks and our goal is to provide users with protection.