Why are they building AEVO?

• Ribbon started off as options vaults, they help sell covered calls to generate yield.

• When you build something in crypto that works, you have 10 copycats:

  • There has been a lot more interest in DOV space, with similar strategies or small tweaks on existing strategies

  • A lot of these products were very similar to each other

  • There isn't a strong moat in the business, especially if all DOV's are doing the same thing and trading against the same 10 institutional market makers

  • The big difference that Ribbon has is trust and their brand: the best product with the best track record

• The question was: how do they move out of this brand game and how do they create more of a moat around the business:

  • They started creating lots of different things, more structured products, new lending business

  • Main focus was expanding into new areas where they have a better moat and a more sustainable business

  • They wanted to figure out how to win in the long term:

    • If they're selling all of these options, where are these options contracts clearing, can they win the options layer instead of the app layer

• Started working on AEVO end of Q1, almost 6 months now.

• Main question was: how do they build the best options trading experience in crypto?

  • Would it look like an AMM or an order book?

  • Even today, you cannot buy 1000 ETH calls without crazy slippage - hard to execute that kind of size

  • Decided that they want to build it from scratch

• There are all of these memes about how there's more options protocols than users, it's a competitive space:

  • They think that the main advantage they have is that they control a large chunk of the options volume in DeFi

  • All options volume on chain basically comes from Ribbon vaults

  • They own the flow, and want to use it towards their advantage

• Decided that they want to own different parts of the stack, both app layer and infrastructure:

  • What if they can integrate these DOV's with an exchange, if the DOV's were on top of an exchange, where the options contracts settle.

  • Example, maybe they can permanently set Ribbon DOV fees to 0.

    • If all DOV's just go through the exchange, where the meat of the business is.

    • This would be very advantageous for them, since they can essentially undercut forever.

• Launch by end of the year.

Why did they choose the name AEVO?

• They spent time on branding and thinking about how this can relate to existing vaults

• Existing product lines have a strong brand in themselves

  • If they stick too much stuff under the same brand it becomes a bit meaningless

  • Existing ribbon brand is on-chain structured products

• It made sense to come up with a different brand for the exchange, which has a different audience

• "AEVO just looks cool, no clear reason": they tried many iterations and that's the one they liked.

How does AEVO relate to RBN token?

• There are no plans for a second token right now

• They want the RBN token to be tightly a part of the AEVO ecosystem

• There are no plans to use RBN token on the rollup

  • The rollup having a random staking mechanism or fees paid in RBN token doesn't make sense

  • Since its a rollup and they have to pay ETH, they won't randomly tack on RBN there

What does AEVO mean for Ribbon Finance, DAO and veRBN Stakers?

• As mentioned before, they want RBN token to be big part of aevo ecosystem

• They want to unite everything

• Logistically, the company is developing both products

What is the relationship between AEVO and Ribbon from protocol revenue perspective?

• Difficult/complicated to answer because AEVO still hasn't launched

• First 6-12 months they will need to operate AEVO under tight control

• There will be no immediate distribution of revenue

• After the first year or so, depending on growth and what the product shapes up to be, they will see how revenue gets split

• They plan to unite it under RBN token

• Some mechanism like buy and burn for value accrual

  • Still very early, can still be changed

  • Product is still very immature, they want to get the product right before the tokenomics

Is Ribbon seeking additional funding?

• There's no need additional funding at the moment, they are comfortable

• If the exchange goes well and they want to pour fuel on the fire through token incentives, they might go with additional funding to get RBN from DAO to spend on incentives

• There's no funding necessary for the development side of things.

Options, Deribit and AEVO

• Deribit is the king of crypto options right now

• From AEVO perspective, it feels like they are sort of the BitMEX of this cycle

  • Strong lead in this market, super dominant, but they have a lot of basic features that are missing

  • It took them a year to launch SOL options

  • All the different options on Deribit don't have the same margin system

  • They use coinbase margin instead of USDC margin

  • They feel sort of like a last cycle exchange

• Teams that can build an options exchange from the ground up can have a lot more modern features

• AEVO wants to first build the best options exchange on-chain

  • They want to be the first thought for people who want to trade options in size instantly

  • They want to be aggressive in launching new markets

    • For example, stuff like coin of the month etc.

• Currently will only offer European options

• At start will offer 100+ markets:

  • Not 100 individual assets, Deribit only has 3 assets, they will offer 100 different things to trade on launch

    • Daily, weekly, monthly and quarterly on different strikes

    • 100+ markets when these are summed up.

• Main issue with other on-chain options projects is that you can only buy weekly options:

  • No serious trader only buys weekly options only

How will they get liquidity?

• They are working with many market makers to bootstrap supply side

• Through their options vaults they work with all major options players in the crypto space

  • They have a long history and relationship with them

  • They have converted some who work with Ribbon to market make on AEVO as well

  • These relationships is one of their strategic advantages as well

    • They have lots of credibility and a good track record compared to fresh seed stage companies

    • They don't need to be integrated, just to have no users - like other seed stage companies may need to be

    • They can bring significant volume

Is there potential for Ribbon Earn's to land on AEVO?

• Initially they will only have vanilla options, not exotic products like Earn.

Product features: orderbook vs AMM

• There have been many options AMM released in the last year and half, at least 5-10

• None of them have reached any significant scale

• This is because AMM's are not suitable for options

  • Options are difficult to price, there are lots more inputs required aside from xy=k

  • With options AMM's, either LPs or buyers lose

• For a successful options exchange, a product needs to be built for the 10 big dealers of options in the crypto space

  • They need to build something for the Alameda's and Genesis' etc.

  • Orderbooks will let these market makers move their prices around and not be limited by a fixed pricing function

Are there plans to offer perps on AEVO?

• Yes, they will launch perps, but not on day 1

• Since they wrote the infrastructure from scratch, they knew they were going to do this day 1

• Once that is launched, you can delta hedge the options etc.

What is the thought process around getting the DOV's flows land on AEVO?

• According to them, this is probably the most interesting thing that they're working on

• It's sort of like if you combined Deribit with a DeFi protocol

  • They are the first to try to build something like this

• The reason why they are building it, and why they think it is important, is because it makes life a lot easier and better for market makers

• Right now when market makers come to Ribbon to buy options, e.g. they buy 20k ETH calls, these calls are represented as oTokens that sits in their wallet.

  • These tokens are non-fungible and just sit in the wallet and do nothing

  • If the market goes up, there's no secondary market to sell them in

  • But, if DOV and exchange are combined, the market makers that bought them can sell them on the exchange, use it as margin etc.

    • This unlocks more capital efficiency for market makers, they can use them with other things

  • Conversely, for users, if right now you use a Ribbon vault you have to sit in the vault all week

    • You cannot exit if the market turns, but by combining the two (the DOV's and the exchange), you can create a better experience, even on the DOV side.

• One important point is that, if you want to create more complex things:

  • A lot of them require a liquidation system and a secondary market for tokens

  • If you want to build complex products, they need to plug into an exchange

  • They decided that they want to build this exchange themselves.

How many market makers does AEVO have?

• Currently they have 4.

• There are some TradFi market makers interested, those who have been setting up crypto desks recently.

Walk us through an example of what a trade would look like

• AEVO will have an off-chain orderbook and off-chain risk system

• You can put collateral on the exchange and before you click buy, the off-chain system checks orderbooks, and the risk system checks if the user has enough margin

• Once these checks are passed, you can buy

• If you market buy, there's an instant match with the sellers

• Once trade is matched, it's posted on the rollup

• The options contracts live on the rollup

• A chunk of all data goes to mainnet.

• The experience will be similar to interacting with a CEX, but at the end of the day, it would settle on chain

  • Similar to a dYdX type of experience

How would you achieve CeFi tight spreads?

• At the start working with a few market makers, agreement that spreads are as tight as they would be on CEX's

• If enough users and retail flows into the exchange, market makers will compete, and this is where spreads will get tighter

• They are trying to first solve supply side, and then demand side.

What is the criteria for listing an asset and for listing an option of the asset

• For now, the team is deciding on what assets are listed

• At launch there will only be ETH options, with BTC available shortly after

• After a few months, smaller tokens will be available

• Listing new markets will initially be a centralized process

• It doesn't make sense for the tokenholder to decide which markets get listed.

Why are they going for their own rollup

• There are a few choices when it comes to building the tech stack:

  • Could be a fast L1, such as Solana or Avalanche, or other rollups

• Their through process is that, since currently they are based on Ethereum, and since most of their users are on Ethereum, they decided to go for rollups.

• However, these rollups have long dispute periods

  • 7 day withdrawals won't work for the exchange

  • Bridges can be used to avoid this, but bridges don't really work if you're moving tens of millions

  • Additionally, when you're using a shared rollup, you're sharing gas limit with other protocols as well, but they need good latency for the market makers, which means they cannot share.

• In the end decided to build their own custom rollup:

  • Signing up for a hosted L2 service, which the provider is running

  • The dispute period down to hours not days

  • They are using a hosted sequencer that the provider will be running

  • Light clients to process deposits from the bridge

  • Everything expected from a rollup will be offered by them

What rollup SDK did they use?

• Optimism fork, everything that comes with it:

  • Optimism standard bridge

  • ERC-20 standard on L2s

• Optimism is forked quite a bit, has good performance and they wanted something that has been battle-tested

  • There are a lot of the ZK rollups and other rollup technologies, but they want to be cautious and go with the tried and trusted method

Which chains will be supported for deposits?

• They will support ETH mainnet deposits

How will they charge users for proofs posted to mainnet?

• Transactions on rollup are batched and posted to mainnet

• Initially, they will be charging users for transaction fees

• Over time, they will move to a flat fee charged on top of the trading fee, which will only be charged if the trade is matched

How can people beta test AEVO?

• They will be starting beta testing in a few weeks:

  • If interested message the AEVO the account

  • They don't want to open it up to too many people - only those with DeFi and options trading experience

Do you plan to have API's?

• Yes will have API's to get all data needed, all the typical data will be available, everything from trades to open orders

Will there be other DOV's using AEVO?

• They are inviting others, however, it is not available for permissionless integration for first 3-6 months

• They are speaking to one team right now.

What attack vectors have they planned for: how will they make sure data feeds are not corruptible?

• Couple of ways to mitigate price/oracle feed corruption:

  • Internal index pricer

  • If there's no liquidity, they bootstrap prices from elsewhere

  • Dispute period

    • If price is incorrect, they can override it

    • Dispute period is there so that if an error happens, contracts don't settle at the wrong price

  • Price bands

How neutral/separate will Ribbon and AEVO be from each other?

• AEVO will be neutral stance.

• They don't want to gatekeep which DOV's are built on the exchange, since more DOV's means more flow and more users

• They want to try and be a neutral settlement platform

Simplifying options trading for users and use cases for small scale investors:

• Initially will be geared towards advanced traders

  • Those who are crypto native options traders, who know what they want but cannot get it from other products available

  • They are interested in branching out towards making simpler, one click strategies.

• Use cases for small scale investors:

  • Current demographic of Ribbon is the right demographic for AEVO

  • These are people who are more crypto native, not purely institutional but small to medium(ish) traders in DeFi, who heard about it on Twitter and understand options.

  • Current demographic of RB

When will whitepaper be released?

• They will release it in conjunction with their launch on mainnet: hopefully in next two months or less!

Undercollateralized Lending

• Has a bad reputation because of 3AC.

• For DeFi to grow, there needs to be more capital efficient ways to borrow capital

  • You cannot let random degens do it, but undercollateralized lending will start with KYC'd institutions, and then might expand over time to individuals if protocols can create an on-chain credit score system.

• Someone with experience and capital might be allowed to borrow undercollateralized

  • Soulbound tokens etc. could facilitate this

  • Industry has to go that way at some point

• AMM's got more efficient over time, similar thing should happen in terms of lending/borrowing

• 3AC happened because of lack of transparency, on-chain you can verify what borrowers are doing and you can monitor on-chain health

• Stablecoin yields undercollateralized lending protocols offer are pretty decent

• AMMs are trending towards capital efficiency, natural for money markets to do the same

  • Trader Joe, Orca etc. all need to create concentrated liquidity pools just to compete because its more efficient

• Whatever protocol figures out how to do undercollateralized lending first, will take out market share

• Undercollateralized Lending Protocols: Maple, Ribbon and Clearpool

• On-chain credit score service - Credora

  • Credora has: 16 DeFi integrations, 25 CeFi, 80 borrowers, 25 lenders, $785m loans facilitated, $3.85b total value monitored

• Clearpool is on Ethereum and Polygon

  • Stablecoin lending APR is okay for Clearpool, additionally you get CPOOL tokens as well

Ribbon Lend - Allows undercollateralized lending through ribbon lend - AEVO is building a rollup - L2 on ethereum - A CLOB/DEX for options and will onboard market maker's - Will offer 100+ markets (not assets different timeframes, strikes etc.)

• AEVO will offer daily, weekly, monthly options (currently on-chain options protocols only offer weekly) and will get liquidity through market makers to bootstrap the supply side

• For on-chain options you fix the supply side and the demand side will naturally follow, the biggest problem for on-chain options is liquidity.

• For DEX's like GMX, gains etc. quite easy, you just use oracles and for GMX you use GLP which people can buy and trade whatever assets are in it.

• For options you need to worry about the greeks and different time frames, and an on-chain AMM is not possible, best way to do it is to create a marketplace by onboarding large mm's to create tight spreads in liquid markets

• There's demand for options, but there isn't a marketplace for people to trade options yet:

  • Because right now to be an LP on Premia sometimes you lose, and your funds get locked up.

  • In Dopex you have to write these options yourself. Not really scalable.

• Majority of options in DeFi go through Ribbon finance, which is an advantage for Ribbon

• DOV's you deposit USDC and Ribbon will take that and deploy to earn you yield

  • Historically this hasn't been that profitable, but Ribbon essentially facilitates where the money flows on Opyn etc.

• If Ribbon can create their own on chain options DEX, that is super liquid, it will make Ribbon a more attractive platform,

  • They can charge zero fees for the DOV's to be created on top of the DEX, which makes it more liquid and makes it more favourable to trade.

  • If you're an options trader this composability aspect is interesting

• Any protocol that figures out on-chain AMM's for options will be a multi billion dollar protocol

  • Building/designing this AMM is difficult, won't be easy

Conic Finance

• Curve omni pools, built on top of Convex

• Deposit USDC/ETH on Conic. Conic will automatically redirect it into highest yielding Convex pools. Conic will accumulate CRV/CVX.

• Potential member of the flywheel. Pre-product.

• If you locked your CVX before March this year you were eligible for the Conic airdrop

• Only 36% of the CNC were claimed and the rest gets sent to the treasury

• Thats 10% of the supply, so 3.6% of total supply got claimed, and the rest 6.4% got sent to the treasury.

  • People aren't paying attention

  • They had originally allocated like 6% of the supply to the treasury but it doubled because people who held vlCNX didn't claim their allocation

• Reasonable chance of becoming part of the flywheel because 22m MC, 40m FDV

• CVX and CRV are both $100m apps, without CVX, Curve would be valued less because of flywheel mechanic

• Conic will make CVX more valuable, and Conic will also participate in bribes

  • Will be a net beneficial player at least in Curve flywheel

  • Curve and Convex devs are on the multi-sig and has a clear value prop

• Decent amount of sell pressure - 30% of total CNC sold for 400k for community raise.

  • No lock up on these tokens.

Aura Finance

• Governance aaggregator where they're going to accumulate veBAL first, but will expand to others ve- tokens.

• 0xMaki is on the founding team

  • He's also working on LayerZero

  • Turned sushi swap around in 2020

• Aura has 26% share of the veBAL token

  • Don't really believe in the balancer wars, but if aura has the majority of the share for balancer, and they expand into other ve- tokens, it can have value

• Market cap is $23 mil which is pretty cheap

  • To get veBAL you need to lock up in 80-20 pools, 80% BAL 20% ETH so instead of locking up into CRV for four years, you lock LP tokens for one to two years

• Amount of liquidity in BAL pools is going up.

• 0.07/1.75 = 4% yield per Aura per round

  • 26 rounds per years = 104% APR

  • If it's just veBAL not interesting, but if there are more governance tokens accumulated then that is pretty cool.

  • Their focus will be on yield bearing tokens according to dev.

Solana Metrics

• US developers on Solana are crazy, constant development

• Developer activity and volume are super high, but anyone can manipulate this because fees are super low on Solana - lots of bots.

• If you talk to devs there's still a lot of people building

• Issue is: do people want to build on a blockchain or hold dollars on a blockchain that keeps going down?

• Where are people building? What are they building?

• Founder's worked at Qualcomm, Solana phone is coming out!

• Orca Whirlpools - essentially concentrated liquidity positions, SOL-USDC pool is really interesting

  • Zero emission rewards - 124% APR (now 64%)

• Main focus is ETH based DeFi (GMX/GAINS) and majors

• Solana & ATOM will be on buy list. NEAR after those.

• Bearish alt EVM L1s - now that Arbitrum and Optimism is doing better especially in terms of ecosystem, not much benefit in Avalanche.

• Uptober, Upvember, Upcember - is a thing historically

• November to June of midterm years market performance has always been positive.

• Powell talks about wanting to a see a weaker labor market

• FED-driven, inflation driven market

Why are they building AEVO?

• Ribbon started off as options vaults, they help sell covered calls to generate yield.

• When you build something in crypto that works, you have 10 copycats:

  • There has been a lot more interest in DOV space, with similar strategies or small tweaks on existing strategies

  • A lot of these products were very similar to each other

  • There isn't a strong moat in the business, especially if all DOV's are doing the same thing and trading against the same 10 institutional market makers

  • The big difference that Ribbon has is trust and their brand: the best product with the best track record

• The question was: how do they move out of this brand game and how do they create more of a moat around the business:

  • They started creating lots of different things, more structured products, new lending business

  • Main focus was expanding into new areas where they have a better moat and a more sustainable business

  • They wanted to figure out how to win in the long term:

    • If they're selling all of these options, where are these options contracts clearing, can they win the options layer instead of the app layer

• Started working on AEVO end of Q1, almost 6 months now.

• Main question was: how do they build the best options trading experience in crypto?

  • Would it look like an AMM or an order book?

  • Even today, you cannot buy 1000 ETH calls without crazy slippage - hard to execute that kind of size

  • Decided that they want to build it from scratch

• There are all of these memes about how there's more options protocols than users, it's a competitive space:

  • They think that the main advantage they have is that they control a large chunk of the options volume in DeFi

  • All options volume on chain basically comes from Ribbon vaults

  • They own the flow, and want to use it towards their advantage

• Decided that they want to own different parts of the stack, both app layer and infrastructure:

  • What if they can integrate these DOV's with an exchange, if the DOV's were on top of an exchange, where the options contracts settle.

  • Example, maybe they can permanently set Ribbon DOV fees to 0.

    • If all DOV's just go through the exchange, where the meat of the business is.

    • This would be very advantageous for them, since they can essentially undercut forever.

• Launch by end of the year.

Why did they choose the name AEVO?

• They spent time on branding and thinking about how this can relate to existing vaults

• Existing product lines have a strong brand in themselves

  • If they stick too much stuff under the same brand it becomes a bit meaningless

  • Existing ribbon brand is on-chain structured products

• It made sense to come up with a different brand for the exchange, which has a different audience

• "AEVO just looks cool, no clear reason": they tried many iterations and that's the one they liked.

How does AEVO relate to RBN token?

• There are no plans for a second token right now

• They want the RBN token to be tightly a part of the AEVO ecosystem

• There are no plans to use RBN token on the rollup

  • The rollup having a random staking mechanism or fees paid in RBN token doesn't make sense

  • Since its a rollup and they have to pay ETH, they won't randomly tack on RBN there

What does AEVO mean for Ribbon Finance, DAO and veRBN Stakers?

• As mentioned before, they want RBN token to be big part of aevo ecosystem

• They want to unite everything

• Logistically, the company is developing both products

What is the relationship between AEVO and Ribbon from protocol revenue perspective?

• Difficult/complicated to answer because AEVO still hasn't launched

• First 6-12 months they will need to operate AEVO under tight control

• There will be no immediate distribution of revenue

• After the first year or so, depending on growth and what the product shapes up to be, they will see how revenue gets split

• They plan to unite it under RBN token

• Some mechanism like buy and burn for value accrual

  • Still very early, can still be changed

  • Product is still very immature, they want to get the product right before the tokenomics

Is Ribbon seeking additional funding?

• There's no need additional funding at the moment, they are comfortable

• If the exchange goes well and they want to pour fuel on the fire through token incentives, they might go with additional funding to get RBN from DAO to spend on incentives

• There's no funding necessary for the development side of things.

Options, Deribit and AEVO

• Deribit is the king of crypto options right now

• From AEVO perspective, it feels like they are sort of the BitMEX of this cycle

  • Strong lead in this market, super dominant, but they have a lot of basic features that are missing

  • It took them a year to launch SOL options

  • All the different options on Deribit don't have the same margin system

  • They use coinbase margin instead of USDC margin

  • They feel sort of like a last cycle exchange

• Teams that can build an options exchange from the ground up can have a lot more modern features

• AEVO wants to first build the best options exchange on-chain

  • They want to be the first thought for people who want to trade options in size instantly

  • They want to be aggressive in launching new markets

    • For example, stuff like coin of the month etc.

• Currently will only offer European options

• At start will offer 100+ markets:

  • Not 100 individual assets, Deribit only has 3 assets, they will offer 100 different things to trade on launch

    • Daily, weekly, monthly and quarterly on different strikes

    • 100+ markets when these are summed up.

• Main issue with other on-chain options projects is that you can only buy weekly options:

  • No serious trader only buys weekly options only

How will they get liquidity?

• They are working with many market makers to bootstrap supply side

• Through their options vaults they work with all major options players in the crypto space

  • They have a long history and relationship with them

  • They have converted some who work with Ribbon to market make on AEVO as well

  • These relationships is one of their strategic advantages as well

    • They have lots of credibility and a good track record compared to fresh seed stage companies

    • They don't need to be integrated, just to have no users - like other seed stage companies may need to be

    • They can bring significant volume

Is there potential for Ribbon Earn's to land on AEVO?

• Initially they will only have vanilla options, not exotic products like Earn.

Product features: orderbook vs AMM

• There have been many options AMM released in the last year and half, at least 5-10

• None of them have reached any significant scale

• This is because AMM's are not suitable for options

  • Options are difficult to price, there are lots more inputs required aside from xy=k

  • With options AMM's, either LPs or buyers lose

• For a successful options exchange, a product needs to be built for the 10 big dealers of options in the crypto space

  • They need to build something for the Alameda's and Genesis' etc.

  • Orderbooks will let these market makers move their prices around and not be limited by a fixed pricing function

Are there plans to offer perps on AEVO?

• Yes, they will launch perps, but not on day 1

• Since they wrote the infrastructure from scratch, they knew they were going to do this day 1

• Once that is launched, you can delta hedge the options etc.

What is the thought process around getting the DOV's flows land on AEVO?

• According to them, this is probably the most interesting thing that they're working on

• It's sort of like if you combined Deribit with a DeFi protocol

  • They are the first to try to build something like this

• The reason why they are building it, and why they think it is important, is because it makes life a lot easier and better for market makers

• Right now when market makers come to Ribbon to buy options, e.g. they buy 20k ETH calls, these calls are represented as oTokens that sits in their wallet.

  • These tokens are non-fungible and just sit in the wallet and do nothing

  • If the market goes up, there's no secondary market to sell them in

  • But, if DOV and exchange are combined, the market makers that bought them can sell them on the exchange, use it as margin etc.

    • This unlocks more capital efficiency for market makers, they can use them with other things

  • Conversely, for users, if right now you use a Ribbon vault you have to sit in the vault all week

    • You cannot exit if the market turns, but by combining the two (the DOV's and the exchange), you can create a better experience, even on the DOV side.

• One important point is that, if you want to create more complex things:

  • A lot of them require a liquidation system and a secondary market for tokens

  • If you want to build complex products, they need to plug into an exchange

  • They decided that they want to build this exchange themselves.

How many market makers does AEVO have?

• Currently they have 4.

• There are some TradFi market makers interested, those who have been setting up crypto desks recently.

Walk us through an example of what a trade would look like

• AEVO will have an off-chain orderbook and off-chain risk system

• You can put collateral on the exchange and before you click buy, the off-chain system checks orderbooks, and the risk system checks if the user has enough margin

• Once these checks are passed, you can buy

• If you market buy, there's an instant match with the sellers

• Once trade is matched, it's posted on the rollup

• The options contracts live on the rollup

• A chunk of all data goes to mainnet.

• The experience will be similar to interacting with a CEX, but at the end of the day, it would settle on chain

  • Similar to a dYdX type of experience

How would you achieve CeFi tight spreads?

• At the start working with a few market makers, agreement that spreads are as tight as they would be on CEX's

• If enough users and retail flows into the exchange, market makers will compete, and this is where spreads will get tighter

• They are trying to first solve supply side, and then demand side.

What is the criteria for listing an asset and for listing an option of the asset

• For now, the team is deciding on what assets are listed

• At launch there will only be ETH options, with BTC available shortly after

• After a few months, smaller tokens will be available

• Listing new markets will initially be a centralized process

• It doesn't make sense for the tokenholder to decide which markets get listed.

Why are they going for their own rollup

• There are a few choices when it comes to building the tech stack:

  • Could be a fast L1, such as Solana or Avalanche, or other rollups

• Their through process is that, since currently they are based on Ethereum, and since most of their users are on Ethereum, they decided to go for rollups.

• However, these rollups have long dispute periods

  • 7 day withdrawals won't work for the exchange

  • Bridges can be used to avoid this, but bridges don't really work if you're moving tens of millions

  • Additionally, when you're using a shared rollup, you're sharing gas limit with other protocols as well, but they need good latency for the market makers, which means they cannot share.

• In the end decided to build their own custom rollup:

  • Signing up for a hosted L2 service, which the provider is running

  • The dispute period down to hours not days

  • They are using a hosted sequencer that the provider will be running

  • Light clients to process deposits from the bridge

  • Everything expected from a rollup will be offered by them

What rollup SDK did they use?

• Optimism fork, everything that comes with it:

  • Optimism standard bridge

  • ERC-20 standard on L2s

• Optimism is forked quite a bit, has good performance and they wanted something that has been battle-tested

  • There are a lot of the ZK rollups and other rollup technologies, but they want to be cautious and go with the tried and trusted method

Which chains will be supported for deposits?

• They will support ETH mainnet deposits

How will they charge users for proofs posted to mainnet?

• Transactions on rollup are batched and posted to mainnet

• Initially, they will be charging users for transaction fees

• Over time, they will move to a flat fee charged on top of the trading fee, which will only be charged if the trade is matched

How can people beta test AEVO?

• They will be starting beta testing in a few weeks:

  • If interested message the AEVO the account

  • They don't want to open it up to too many people - only those with DeFi and options trading experience

Do you plan to have API's?

• Yes will have API's to get all data needed, all the typical data will be available, everything from trades to open orders

Will there be other DOV's using AEVO?

• They are inviting others, however, it is not available for permissionless integration for first 3-6 months

• They are speaking to one team right now.

What attack vectors have they planned for: how will they make sure data feeds are not corruptible?

• Couple of ways to mitigate price/oracle feed corruption:

  • Internal index pricer

  • If there's no liquidity, they bootstrap prices from elsewhere

  • Dispute period

    • If price is incorrect, they can override it

    • Dispute period is there so that if an error happens, contracts don't settle at the wrong price

  • Price bands

How neutral/separate will Ribbon and AEVO be from each other?

• AEVO will be neutral stance.

• They don't want to gatekeep which DOV's are built on the exchange, since more DOV's means more flow and more users

• They want to try and be a neutral settlement platform

Simplifying options trading for users and use cases for small scale investors:

• Initially will be geared towards advanced traders

  • Those who are crypto native options traders, who know what they want but cannot get it from other products available

  • They are interested in branching out towards making simpler, one click strategies.

• Use cases for small scale investors:

  • Current demographic of Ribbon is the right demographic for AEVO

  • These are people who are more crypto native, not purely institutional but small to medium(ish) traders in DeFi, who heard about it on Twitter and understand options.

  • Current demographic of RB

When will whitepaper be released?

• They will release it in conjunction with their launch on mainnet: hopefully in next two months or less!

Undercollateralized Lending

• Has a bad reputation because of 3AC.

• For DeFi to grow, there needs to be more capital efficient ways to borrow capital

  • You cannot let random degens do it, but undercollateralized lending will start with KYC'd institutions, and then might expand over time to individuals if protocols can create an on-chain credit score system.

• Someone with experience and capital might be allowed to borrow undercollateralized

  • Soulbound tokens etc. could facilitate this

  • Industry has to go that way at some point

• AMM's got more efficient over time, similar thing should happen in terms of lending/borrowing

• 3AC happened because of lack of transparency, on-chain you can verify what borrowers are doing and you can monitor on-chain health

• Stablecoin yields undercollateralized lending protocols offer are pretty decent

• AMMs are trending towards capital efficiency, natural for money markets to do the same

  • Trader Joe, Orca etc. all need to create concentrated liquidity pools just to compete because its more efficient

• Whatever protocol figures out how to do undercollateralized lending first, will take out market share

• Undercollateralized Lending Protocols: Maple, Ribbon and Clearpool

• On-chain credit score service - Credora

  • Credora has: 16 DeFi integrations, 25 CeFi, 80 borrowers, 25 lenders, $785m loans facilitated, $3.85b total value monitored

• Clearpool is on Ethereum and Polygon

  • Stablecoin lending APR is okay for Clearpool, additionally you get CPOOL tokens as well

Ribbon Lend - Allows undercollateralized lending through ribbon lend - AEVO is building a rollup - L2 on ethereum - A CLOB/DEX for options and will onboard market maker's - Will offer 100+ markets (not assets different timeframes, strikes etc.)

• AEVO will offer daily, weekly, monthly options (currently on-chain options protocols only offer weekly) and will get liquidity through market makers to bootstrap the supply side

• For on-chain options you fix the supply side and the demand side will naturally follow, the biggest problem for on-chain options is liquidity.

• For DEX's like GMX, gains etc. quite easy, you just use oracles and for GMX you use GLP which people can buy and trade whatever assets are in it.

• For options you need to worry about the greeks and different time frames, and an on-chain AMM is not possible, best way to do it is to create a marketplace by onboarding large mm's to create tight spreads in liquid markets

• There's demand for options, but there isn't a marketplace for people to trade options yet:

  • Because right now to be an LP on Premia sometimes you lose, and your funds get locked up.

  • In Dopex you have to write these options yourself. Not really scalable.

• Majority of options in DeFi go through Ribbon finance, which is an advantage for Ribbon

• DOV's you deposit USDC and Ribbon will take that and deploy to earn you yield

  • Historically this hasn't been that profitable, but Ribbon essentially facilitates where the money flows on Opyn etc.

• If Ribbon can create their own on chain options DEX, that is super liquid, it will make Ribbon a more attractive platform,

  • They can charge zero fees for the DOV's to be created on top of the DEX, which makes it more liquid and makes it more favourable to trade.

  • If you're an options trader this composability aspect is interesting

• Any protocol that figures out on-chain AMM's for options will be a multi billion dollar protocol

  • Building/designing this AMM is difficult, won't be easy

Conic Finance

• Curve omni pools, built on top of Convex

• Deposit USDC/ETH on Conic. Conic will automatically redirect it into highest yielding Convex pools. Conic will accumulate CRV/CVX.

• Potential member of the flywheel. Pre-product.

• If you locked your CVX before March this year you were eligible for the Conic airdrop

• Only 36% of the CNC were claimed and the rest gets sent to the treasury

• Thats 10% of the supply, so 3.6% of total supply got claimed, and the rest 6.4% got sent to the treasury.

  • People aren't paying attention

  • They had originally allocated like 6% of the supply to the treasury but it doubled because people who held vlCNX didn't claim their allocation

• Reasonable chance of becoming part of the flywheel because 22m MC, 40m FDV

• CVX and CRV are both $100m apps, without CVX, Curve would be valued less because of flywheel mechanic

• Conic will make CVX more valuable, and Conic will also participate in bribes

  • Will be a net beneficial player at least in Curve flywheel

  • Curve and Convex devs are on the multi-sig and has a clear value prop

• Decent amount of sell pressure - 30% of total CNC sold for 400k for community raise.

  • No lock up on these tokens.

Aura Finance

• Governance aaggregator where they're going to accumulate veBAL first, but will expand to others ve- tokens.

• 0xMaki is on the founding team

  • He's also working on LayerZero

  • Turned sushi swap around in 2020

• Aura has 26% share of the veBAL token

  • Don't really believe in the balancer wars, but if aura has the majority of the share for balancer, and they expand into other ve- tokens, it can have value

• Market cap is $23 mil which is pretty cheap

  • To get veBAL you need to lock up in 80-20 pools, 80% BAL 20% ETH so instead of locking up into CRV for four years, you lock LP tokens for one to two years

• Amount of liquidity in BAL pools is going up.

• 0.07/1.75 = 4% yield per Aura per round

  • 26 rounds per years = 104% APR

  • If it's just veBAL not interesting, but if there are more governance tokens accumulated then that is pretty cool.

  • Their focus will be on yield bearing tokens according to dev.

Solana Metrics

• US developers on Solana are crazy, constant development

• Developer activity and volume are super high, but anyone can manipulate this because fees are super low on Solana - lots of bots.

• If you talk to devs there's still a lot of people building

• Issue is: do people want to build on a blockchain or hold dollars on a blockchain that keeps going down?

• Where are people building? What are they building?

• Founder's worked at Qualcomm, Solana phone is coming out!

• Orca Whirlpools - essentially concentrated liquidity positions, SOL-USDC pool is really interesting

  • Zero emission rewards - 124% APR (now 64%)

• Main focus is ETH based DeFi (GMX/GAINS) and majors

• Solana & ATOM will be on buy list. NEAR after those.

• Bearish alt EVM L1s - now that Arbitrum and Optimism is doing better especially in terms of ecosystem, not much benefit in Avalanche.

• Uptober, Upvember, Upcember - is a thing historically

• November to June of midterm years market performance has always been positive.

• Powell talks about wanting to a see a weaker labor market

• FED-driven, inflation driven market