Cryptos: Ribbon rolls out options exchange on ETH

DeFi Derivatives Protocol Ribbon Finance has launched a high-performance options exchange called Aevo.

The new facility is the latest in the company’s suite of structured financial products and is aimed at investors seeking to trade ethereum options on-chain. Built on Ethereum, the first iteration will only offer ETH options, but other cryptocurrencies will become available in the coming months, including Bitcoin, stated the firm.

The Aevo platform is built on a ‘custom’ Ethereum rollup, built by Ribbon which will offer ‘deep liquidity at launch’ thanks to partnerships with five options-centric market makers.

The vaults will be built on top of the exchange, giving users much more flexibility in choosing their positions or hedging them - Julian Koh, Ribbon

The move to launch an options exchange follows the launch of Ribbon’s previous products - Theta Vaults, which leverages an automated ethereum put-selling options strategy to generate yield for investors. These vaults will also be integrated with Aevo.

‘The vaults will be built on top of the exchange, giving users much more flexibility in choosing their positions or hedging them,’ said Julian Koh, CEO and co-founder of Ribbon. ‘We can generate significantly more volume by enabling traders to do much more than just sell options once a week.’

Zerocap launches ETH note as software upgrade drives volatility

Australian digital assets investment and advisory specialist Zerocap has developed a bespoke vehicle targeted at investors seeking to benefit by harvesting yield opportunities in the Ethereum (ETH) market.

The Zerocap ETH Merge Note provides dual outcomes on the back of Ethereum's Proof-of-Stake (PoS) merge this month. Investors could generate yields from the high price of volatility by selling the topside return performance above 20% to other market participants. This yield is then harvested to be paid out either in a fixed coupon (40%) or in a discount entry into Ethereum (-15%), depending on where the market is at expiry.

The ETH Merge Note is the latest structured product from Zerocap. The company has already offered structured products including a proprietary digital asset investment strategy such as its Smart Beta Bitcoin strategy.

Zerocap brings well-honed investment techniques, instruments and strategies from traditional finance to provide a range of structured products and investment strategies. These aim to enable investors access and enhance yield opportunities on their portfolio, manage the risk/reward equation in the highly volatile crypto markets, and manage market entry and exit risks.

‘It's fascinating times in cryptoland with widespread institutional adoption continuing and significant venture capital available but currently sitting on the sidelines,’ said Zerocap chief investment officer Jon de Wet (above-right). ‘However, the macroeconomic environment is clearly weighing heavily on all risk assets, with geopolitical concerns reshaping east and west relationships and inflation trending higher.’

According to de Wet, technology breakthroughs are taking blockchain protocols to the next level bringing ‘scalability improvements, faster transactions, and lower fees, but also turn an energy intensive asset into an ESG friendly one - reducing its carbon footprint by 99.5%’.

Eqonex debuts multi-currency crypto ETN

Eqonex Limited has expanded its product offering with a USD-denominated bitcoin exchange-traded note (ETN) listed on the Deutsche Börse Xetra Exchange.   

Eqonex Bitcoin ETNs provide direct investment exposure to bitcoin via an exchange-traded, physically-backed product. Investors can trade in and out of ETNs via their existing brokerage accounts with Euro or USD. The bitcoin underlying the ETN will be stored in the group's Financial Conduct Authority (FCA) registered custody provider Digivault, which is one of only 35 exchange or custody providers to hold this accreditation.

The USD denominated Eqonex Bitcoin ETN follows the launch of the company’s inaugural Euro denominated version launched in July. Eqonex received ETN prospectus approval from Germany's Federal Financial Supervisory Authority (BaFin) and has plans to offer a suite of crypto exchange-traded products soon.  

‘For many, the USD remains a default investment currency, so we were eager to prioritise a USD version which also bears our hallmark benefits such as free redemptions and secure custody,’ said Frank Copplestone (right), Eqonex head of investment products.

Eqonex offers additional investor protection by holding the underlying physical bitcoin in a segregated account under a Security Trustee structure, to ensure it is not used for rehypothecation

The bitcoin underpinning the Eqonex Bitcoin ETN is held in Digivault. Flow Traders B.V. will register with Deutsche Börse to perform the role of Eqonex 's designated sponsor which requires quality criteria regarding tradable volumes and bid-ask spreads.

Flynt releases ‘high yield’ leveraged BTC play

Singapore-based Flynt Finance has launched a platform for crypto structured products and its very own structured product strategy.

The BTC Covered Call Strategy x5 sells call options on a weekly basis and reinvests the premium earned into the following week. Based on the full three-year set of trading data from cryptocurrency options platform Deribit, the company derived a proprietary strike price selection algorithm that maximises returns and minimises the chance of taking a loss.

Flynt uses up to five times (5x) leverage on their strategies to both increase the returns as well as decrease the chance of taking a loss by selecting a further out-of-the-money (OTM) strike price. According to Flynt’s backtesting, this resulted in an average APR of 47% (including losses) compared to the industry average of about 15% (not including losses).

‘For most people, a non-leveraged covered call strategy should be just fine, but for those that would like to take more risk for higher returns should definitely give Flynt a try,’ said David Seo, CEO of Flynt Finance.

Since 2021 there has been a rush to offer covered call strategies on various cryptocurrencies for the yield-hungry crypto investors.

‘These strategies have been growing rapidly since their inception and have held up surprisingly well during the more recent downturn,’ said Seo.

OrBit partners with Laevitas in exotic options push

Institutional liquidity provider in digital asset options and structured products OrBit Markets has joined efforts with quantitative data analytics platform for the crypto-asset market Laevitas to launch prices of binary options on bitcoin, Ethereum, solana and avalanche.

Under the agreement, Orbit’s clients will be able to access Laevitas’ existing offering of crypto derivatives analytics as well as ‘accurate’ pricing data across a wide range of exotic options products.

The new products are not listed on exchanges but are widely used by institutional investors as an essential instrument for their trading strategies, according to Caroline Mauron (right), CEO and co-founder of OrBit.

‘We have seen surging interests in exotic and structured derivatives in recent months,’ she said, adding that the pricing of these products, not observable in the market, requires advanced quantitative models to compute.

‘The bilateral nature of such business can result in a pricing opacity that makes it difficult for some institutions to participate,’ said Mauron.

OrBit is seeking to capitalise on its ‘strong derivatives expertise’ and leverage Laevitas’ analytics platform to meet investors’ demand for institutional-grade tools and data ‘to analyse more sophisticated derivatives products’.

Image: Siberian Art/Adobe Stock