Vault Design

Points:

• Oracle Free Perpetual Option Protocol

• The exchange of tokens relies on Uniswap

• Applicable to all token pairs in Uniswap

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Smart contracts manage $OptionVault$ by performing three main operations.

• Exchange of $x$ and $y$

• $Asset$ Management

• $Debt$ Management

$OptionVault$ has $Margin$ to pay/earn Premium with the $Asset/Debt$ management as follows:

• Mint and Burn of $LPT$, Lending and borrowing of $LPT$

• Deposits and withdrawals of $x$ or $y$​

• Lending and borrowing of $x$ or $y$

Predy v3 defines $Safe$ as follows, allowing Option positions to be taken in the Vault.

$$\begin{align*} [Safe_{Predy_{v3}}]\\ OptionVault_{value} &= f_2(x_a,y_a,LPT_{asset}) - f_2(x_d,y_d,LPT_{debt}) + Margin &\\ & > Min.Deposit (> 0)&\\ \end{align*}$$

Note:

• In smart contracts, each option is corresponding to a SubVault.

• Daily Premium payments are made in Margin and are not compounded.