Decentralized platform to exercise PUT options allowing users to hedge against price drops
Our project is a decentralized PUT options protocol built natively on Flow EVM that creates a marketplace for crypto portfolio hedging.The Problem: DeFi investors face massive downside risk when staking or investing in volatile assets. A 30% market crash can wipe out months of staking rewards.Our Solution: We enable two complementary use cases:Risk Protection: Stakers can buy PUT options to guarantee they can sell their assets at a predetermined price, limiting losses to ~2% while keeping unlimited upsideYield Generation: Investors can sell PUT options to earn premium income, creating diversified revenue streamsHow it Works? When you stake tokens (e.g., on Ankr for 10% APY), you can simultaneously purchase a PUT option that acts as insurance. If the asset crashes below your strike price, you can force the option seller to buy your tokens at the protected price. The protocol automatically matches buyers and sellers in a decentralized marketplace.What is the impact? This transforms high-risk DeFi investments into risk-managed positions, potentially unlocking billions in institutional capital that currently avoids DeFi due to volatility concerns.
How the project is built:- Smart Contracts: Solidity-based option management system deployed on Flow EVM- Frontend: Next.js application with TypeScript, using Wagmi for blockchain interactions- Database: Prisma ORM with relational database for off-chain data indexingSponsors:- Chainlink: Provides decentralized price feeds that ensure fair option pricing and prevent manipulation. This was crucial for building trust in our option exercise mechanism- Flow Blockchain: Offers the perfect balance of EVM compatibility (easy developer experience) with superior performance (sub-second finality, predictable low fees)Technical Highlights:- Atomic Transactions: Option creation, premium payment, and collateral locking happen in single transactions- Event-Driven Updates: Real-time synchronization between blockchain events and frontend using contract event listeners- Hybrid Data Strategy: Critical financial data lives on-chain while metadata is cached off-chain for performanceNotable Implementation: We built a custom event watching system that automatically updates the database when options are bought, exercised, or expire, ensuring perfect synchronization between on-chain state and user interface.