PsyOptions

PsyOptions is an American-style options protocol built on the Solana blockchain. The principles that guided the architecture and development of the underlying protocol are flexibility and compositionality. It's completely unreliable. The core protocol makes no assumptions about how options should be traded or valued. Options are represented as SPL tokens, which means they can be traded on any DEX that supports SPL tokens.

V1 supports 100% collateralized, settled assets, covered calls and protected puts.

Architecture

There are five main parameters that the protocol uses when interacting with the options markets.

underlying asset

Quoted asset

Contract size

Execution price

Expiration

Any user can initialize the market by providing these values ​​as arguments. The fungibility of option SPL tokens is determined by the uniqueness of these options.

Writing an option

To write an option, you need to lock up the underlying asset in the amount indicated by the options market. For a SOL/USDC option with an underlying asset size of 100, 100 SOL will be locked in order to mint the option token. The author of the option will receive two SPL tokens. One of them is an option that the user can sell for a profit. The other is a written contract (a claim on the underlying asset) and can be exchanged for the underlying asset upon expiration.

Exercise of the option

Holding an option token until expiration gives the user the ability to transact by exchanging the quoted asset for the underlying asset. Whether you have an in-the-money option or not, it is entirely up to the owner of the token whether to use it or not. When performing the exercise, the performer blocks the value of the quoted asset [strike price * size of the underlying asset], burns the option marker and receives the underlying asset.