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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 a Lending Market and Uniswap v3 Pools, which are all housed within the v3 interface.
$XYZ-C (Call Basic Vault LP Token) and $XYZ-P (Put Basic Vault LP Token) represent fungible and transferrable tokenized Basic Vault positions – and form the backbone of all trading strategies on Thetanuts Finance v3.
- Basic Vaults Remain the Core of Thetanuts Finance v3: Basic Vaults will continue to be at the core of Thetanuts Finance, with the Basic Vault LP tokens being used to bootstrap the rest of the v3 ecosystem. This allows Thetanuts Finance to leverage their prior track record of leading Option Vault protocol focused on altcoins.
- Housing v3 under a Unified Interface: v3 will feature an upgraded trading-like interface, abstracting the need for traders to interact individually with Basic Vaults, AMM, and the Lending / Borrowing Market.
- Ability to Buy Options: Option Vault strategies mainly center around the sell-side, with no ability for users to go long — v3 will change this through the use of the AMM and Lending Market.
- Flexibility to Exit Basic Vault LP Positions: Prior to v3, Vault LPs would need to wait until the end of the next epoch — implying that they could not exit their positions until a week later. With the AMM, a user could simply swap out of the Basic Vault LP token — instantly closing their position without having to wait for the end of the epoch.
- Battle-tested Infrastructure: Aave v2 was referenced during the creation of the Thetanuts Finance v3 Lending Market, with the protocol never being exploited prior. Combined with the Thetanuts Finance and Uniswap v3 tech stack that has never been exploited, the Thetanuts Finance team is confident of the security and safety of the v3 upgrade.
- Additional Sources of Yield and Incentives: Through Thetanuts Finance v3, users have access to additional sources of yield beyond just option premiums from the Basic Vaults. These additional sources include: lending interest from the Lending Market, trading fees from AMM, potential $NUTS token incentives, and potential additional token incentives.
- Protocol Solvency: Basic Vaults in Thetanuts Finance are 100% collateralized.
- Free Market Pricing: Unlike other option protocols where IV is used as an input to price options, v3 features free market pricing — whereby if users believe that AMM pricing is incorrect, they can arbitrage this opportunity for profit.