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Thetanuts Finance is a decentralized on-chain options protocol focused on altcoin options, allowing users to go long or short on on-chain options.
The first iteration of Thetanuts Finance in September 2021 saw the launch of Basic Vaults — where the Basic Vaults sold out-of-money (“OTM”) European cash-settled options to accredited market makers, and generate yields for users in the form of option premiums.
With the v3 upgrade, Thetanuts Finance will pivot toward a decentralized on-chain options protocol focused on altcoin options. Our first-to-market v3 architecture uses our existing Basic Vault LP Tokens to extend new use cases in on-chain options trading — enabled by the creation of additional AMM and Lending Market primitives, which are all housed within the v3 interface.
Option Vault protocols performed well in 2021/2022 for a number of reasons, hitting a peak TVL of $550m in April 2022 - and currently down ~90% from April 2022 highs.
As Option Vaults became a mature product, market participants have identified a number of structural shortcomings with Option Vault mechanisms — which eventually led to their decline.
Despite the structural shortcomings and decline of the Option Vault sector within DeFi — Thetanuts Finance was the second largest Option Vault protocol by TVL, and the Options protocol with the largest coverage of altcoin options.
With these successes in mind and in wanting to leverage our track record of being a leading Options protocol focused on altcoin options, Thetanuts Finance v3 will see us move away from being an Option Vault protocol and becoming a decentralised on-chain options protocol focused on altcoins.
Users can expect to see a number of fees on Thetanuts Finance, corresponding to the different modules on Thetanuts Finance v3.
Protocol fees earned by Thetanuts Finance will be accrued to the Treasury, in which the Thetanuts Finance DAO will have governance rights over.
A user can deposit into the option vault(s) at any point in time except during the auction period when the option vault(s) are locked. Users who deposited their underlying asset mid epoch will not gain any potential upside and are exposed to any potential downside option risks.
Therefore, it is highly encouraged for users to check the expiration date of the option vault(s) and initiate their deposit before the current epoch of the option vault(s) expires. When a new epoch starts, the user's deposits would automatically enter the new epoch and start earning option premiums (yield) in the form of their underlying asset.
A user can initiate withdrawals from the Thetanuts Basic vault(s) at any point in time except during the auction period when the option vault(s) are locked. After a user has initiated a withdrawal, it will show up as “withdrawal pending”. Users can cancel their withdrawal at any point in time before the epoch has ended.
Once the user initiates a withdrawal, their underlying assets will join a withdrawal pool. The underlying assets in the withdrawal pool will not participate in the next epoch cycle. Users will still receive the option premiums (yield) from the previous epochs that they have participated in.
Yes. Thetanuts Finance raised a $18mm Seed round in April 2022, followed by a $17mm Series A round in April 2023. Our investors include Polychain Capital, QCP Capital, Deribit, Paradigm, GSR, Wintermute, Jump, GoldenTree Asset Management, Tribe Capital, and others.
As part of our transition to Thetanuts Finance v3 - we seek to streamline the user experience by bringing in-house certain products that have little synergy with our v3 upgrade, as we look to revamp them for the future.