Dopex Option Pricing Model

Market-Making and pricing options in DeFi come with challenges, primarily due to the inconsistency of options demand and data sets (SD, Variance), which are customarily employed as a discovery mechanism for evaluating the IV (Implied Volatility) component of the Black-Scholes formula (A formula widely used to price options contracts.) Dopex does not require a price discovery mechanism as it prices its options accurately by coordinating implied volatility oscillations to major CEXes where the majority of the options volume transpires. This feature ensures proper option pricing so that both parties (buyer and seller) are kept from holding the short end of the stick. In contrast, AMM models, under certain circumstances, disadvantage users by underpricing or overpricing options in periods of low/high volatility.