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Option Liquidity Pools


  • OLPs allow SSOV purchasers to exit positions mid-epoch against a liquidity pool
  • LPs can deposit liquidity to purchase SSOV positions at a discount

What are Option Liquidity Pools?

Dopex SSOVs are European-style options which can only be settled at expiration. This creates friction for option purchasers that want to exit their positions early.
Option Liquidity Pools ("OLPs") are a secondary marketplace that allow Option Purchasers to sell their positions against a liquidity pool at an IV discount (lower IV equates to cheaper options as per the Black-Scholes Model), allowing them to exit their positions mid-epoch.
OLP liquidity is provided by LPs who are willing to purchase options mid-epoch at a discount. LPs that successfully purchased these options can hold their position till settlement or sell it back into the OLP.

OLP Liquidity Provider

OLP LPs are users that want to purchase options mid-epoch at a discount.
They can select the same parameters as SSOVs, including underlying asset, direction (call or put), strike price, and expiration date. LPs can choose to deposit $USDC or the base asset (e.g $DPX for the $DPX SSOV).
Additionally, LPs can select a discount percentage that is applied to options that are purchased.
Liquidity remains within the pool until utilized by option holders that are willing to sell their options to the pool at the discount. LPs can withdraw their liquidity at any time.

OLP Users

OLP users are SSOV option holders that want to exit their positions mid-epoch and are willing to accept a discount on the price of the option.
They can browse the OLP dashboard for their relevant liquidity pool.
When they enter their chosen liquidity pool, they can view bid positions by OLP LPs which are sorted by discount amount. If the option holder is happy with the discount amount, they can sell their position to the LP and receive tokens from the pool.

Vault Specifications

OLPs are integrated with SSOVs, meaning their specifications are identical.
The only difference is the discount amount which can be selected by LPs when they choose to provide liquidity.
Refer to OLP Walkthrough to see how to use this product via our dApp