🌀Synth Options

Synth Options offer greater affordability, liquidity, and flexibility compared to traditional crypto options, with significantly reduced counterparty risk.

Better, Stronger, Faster

A Synth Option ('synthetic option') is an algorithm that replicates the economic performance of traditional option. Synth Options are like financial chameleons. Similar to how the Pokémon Ditto can transform into other Pokémon, Synth options can replicate traditional option exposure - bur more affordably and flexibly.

Umoja offers 2 types of Synthetic Options:

  1. Hedge Synths: Replicating Put Options

  2. Boost Synths: Replicating Call Options

Synths provide exposure to replicated financial instruments or strategies based on underlying trading. Opening positions initiates trading for that specific position, and closing them halts the underlying trading for the entity involved.

Synth Options have:

  • More Liquidity. 30x+ more liquidity than traditional options provided that they're traded in a much more liquid market (i.e. Perpetual Futures market).

  • More Affordability. Provided that Synths are much more liquid than their traditional options counterpart, they are also more affordable. However, in the case of longer term Synth positions, getting Synth Option exposure could be more capital intensive (i.e. requiring Refundable Collateral).

  • More Flexibility. Since the underlying Perpetual Futures market has no terms and is much more liquid than the Options market, Synth Options have exponentially more term and spike flexibility.

  • Less Risky. Synths lower the traditional risks associated with financial instruments, providing end users with built-in liquidation protection. This ensures users can engage with strategies without the fear of making costly mistakes, especially in Options trading.

To ensure these Synth Options perform as intended, Umoja continuously adjusts a mix of leveraged (borrowed money) and un-leveraged asset positions based on changes in market conditions like price and volatility. This dynamic approach aims to replicate the financial outcomes of options in a more accessible and flexible manner.

Last updated