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Crypto Options DEX Aevo by Ribbon Finance

Ribbon Finance is going to launch Aevo, “a high-performance, order-book based decentralized exchange that comes with all the features necessary for a pro options trader”.

Aevo and Ribbon logos with chart of aggregated open interest of Ethereu options on background

In September 2022 Ribbon Finance, an Ethereum-based DeFi derivatives platform first announced plans to launch Aevo, a new crypto options trading service. Developers promised to launch a closed beta in October 2022, and a public mainnet by the end of the year. Now the company says that the platform will be launched within the next few weeks, which is the beginning of April 2023.

Ribbon Finance is a decentralized finance protocol designed to generate yield by combining options, futures, and fixed income. By combining derivatives, lending and a on-chain options exchange Aevo, Ribbon aims to be the one-stop solution to improve a portfolio's risk-return profile. The project currently works on Ethereum mainnet, Avalanche, and Solana. Its native token is RBN which can be staked on the platform to receive Staked Ribbons (sRBN) on the exchange and get a possibility to vote.

Earlier in 2021 Ribbon figured out a way to package options contracts into vaults, which allows users to profit from an automated options strategy. This is now known as a DOV - DeFi Option Vault. Although DOVs are simple to understand and use, they are often too simple and inflexible for serious traders. Aevo has all the features necessary for a pro options trader, including “a robust margining system (with portfolio margin), as well as hundreds of instruments to trade, including daily/weekly/monthly/quarterly options”.

Aevo aims to become a better alternative to centralized exchanges like Deribit (the world's biggest Bitcoin and Ethereum options exchange). As the developers say, any CEX can be mismanaged, which might hinder the system's P&L. Meanwhile Aevo tries to solve that issue by allowing options’ contracts to be settled on a blockchain.

Eventually, Aevo will be united with Ribbon. Thus RBN Vaults will drive consistent flow to Aevo (currently around $80 million a week), and Aevo will allow much more sophisticated structures to be built on top.

Despite the current downturn on the crypto market, the total Ethereum options open interest across cryptocurrency exchanges has been growing over the last year, according to The Block. Earlier we also wrote about GMX, a decentralized perpetual exchange, which is now gaining popularity. This all might mean that crypto derivatives market is growing now and this might be the right moment to launch a new options DEX.

Ouroboros Capital had an opportunity to test out the beta and shared their experience. To cut to the case: in the end they decided to buy RBN tokens.

According to this thread, Aevo's edge includes passive flow from Ribbon’s DOV which solves the problem of getting liquidity onto the platform, settlement of options in USDC, and a smooth UI/UX.

Very soon we’ll also have an opportunity to check it out and will let you know how it is! Meanwhile we might suggest that buying some RBN could be a smart idea, especially taking into account that now it costs just $0.24 which is 95% below the all-time-high of $4.89…