Panoptic wants to create more options for those trading options.
Crypto options trading has so far been largely limited to Bitcoin and Ethereum contracts on centralized exchanges. Coinglass showed $493.15 million in open interest on the centralized exchange Deribit on October 10 alone, while DeFiLlama recorded $21.23 million in options volume on the decentralized exchanges as a whole the same day.
Today, Panoptic released the beta version of a perpetual options trading platform, allowing users to trade options on any asset available on Uniswap v3.
Perpetual futures, or perps, were popularized by Bitmex in 2016 as a way to trade with leverage without the need for much upfront capital. Unlike traditional futures, offenders are perpetual, meaning they have no expiration date that specifies when traders should buy or sell the asset.
Panoptic hopes to apply perpetual trading to options. Options contracts allow buyers to purchase an asset from a seller at a fixed price in the future, essentially taking a gamble on the future price of an asset.
With trading volume on decentralized exchanges (DEXs) declining every month since March, starting a new DeFi trading platform may not seem immediately lucrative, according to DeFiLlama.
“Perpetual options have been tried in recent years but have seen almost no acceptance, so it may be too complex a product for traders at the moment,” said Julian Koh, co-founder of derivatives platform Aevo. “Vanilla options are complicated enough, but at least most people understand their risk profile.”
But Jesper Kristensen, co-founder of Panoptic, argues that Uniswap liquidity providers have similar payout profiles to selling perpetual options because both amount to placing a bet on low volatility.
“About $3 billion worth of perpetual options have already been sold,” Kristensen said of the Uniswap liquidity providers. “They just have to move to Panoptic now.”
The perpetual options platform represents the first major product launch for Panoptic, which raised $4.5 million in a 2022 fundraising round with Uniswap Labs Ventures.
Derivatives, or contracts that allow market participants to trade based on the price of an asset without owning the underlying asset, have become big business in crypto. According to a report from CCData, derivatives accounted for 79.9% of trading on crypto exchanges in September.
Read more: The founder of DYdX praises the custom decentralized derivatives market
And Panoptic isn’t alone in the perpetual options industry. The layer-1 blockchain Sei announced this week a perpetual options platform with vDEX.