1inch Protected Options: Option-like strategies with built-in stop-loss on 1inch LOP.
What it is: A hybrid DeFi system that creates "protected options" - financial instruments that mimic traditional call/put option payoffs but with built-in stop-loss protection to automatically limit losses. How it works: Users create option-like positions (bet on price going up/down) with customizable parameters: strike price, premium, expiration, and crucially - a stop-loss trigger. If the market moves against them beyond a threshold, the position automatically closes to prevent larger losses. 1inch Integration: Built on the 1inch Limit Order Protocol using custom predicates and amount getters. This enables decentralized execution where anyone can fill orders, while leveraging 1inch's gas-efficient infrastructure. Technical Stack: Smart Contracts: 4 core contracts (OptionsCalculator, StopLossProtection, ProtectedOptionManager, 1inch Integration) Frontend: React UI with Web3 wallet connection, real-time balance tracking, and error handling Oracles: Chainlink price feeds for accurate option pricing and stop-loss triggers Key Innovation: Combines option strategies with automated risk management, making derivatives trading safer for DeFi users while maintaining decentralized execution through 1inch's orderbook.
Built with Solidity 0.8.24 using Hardhat. Four interconnected contracts: OptionsCalculator handles payoff math, StopLossProtection manages risk triggers, ProtectedOptionManager orchestrates everything, and OneinchProtectedOptionsIntegration bridges to 1inch. 1inch Integration: Implemented IAmountGetter interface for custom amount calculations and predicate functions for conditional execution. This was the trickiest part - encoding option data into 1inch's extraData format and creating predicates that check both option profitability AND stop-loss conditions simultaneously. Frontend Stack: React with Wagmi/RainbowKit for Web3 integration. Had to solve several gnarly problems: proper ERC20 ABI handling for real Polygon tokens (vs mocks), one-click WETH approvals, and circuit breaker protection with auto-retry logic. Notable Hacks: Multi-RPC fallbacks with exponential backoff to handle Polygon congestion Smart error classification - different retry strategies for circuit breakers vs user rejections Real-time balance validation with throttled logging to prevent rate limits Dynamic decimal handling (WETH=18, USDC=6) across the entire stack Partner Tech Benefits: Chainlink oracles provide tamper-proof pricing, 1inch LOP enables gas-efficient decentralized execution, Polygon keeps costs at $0.01/tx vs $100+ on Ethereum.