Managed Structured Products

Fixed Term Instrument

In this instance, a vault would take the form of a decentralized options vault that sells volatility at each predetermined time interval.

Every week, a utilizer could propose a suite of n different delta options OTC buys, which would create n markets that correspond to each of the strikes. These utilizers would generally be market makers who are incentivized to purchase options at a discounted price while hedging via an external exchange and capture a spread.

Each created market will be associated with a different strike price a week from the point of market creation. Managers will then buy longZCB from the prediction market with the strike price they deem to be less risky, in the sense that the option is not going to be exercised, and the strike prices that meet the approval criterion will be supplied by the vault and the collateral presented by the managers.

VT holders would represent passive investors with protected exposure for the weekly options short. They can hedge a strike price they deem too risky by buying shortZCB during assessment or post assessment, or increase exposure to a strike price they deem less risky post assessment.