To Infinity & (Rysk) Beyond

Rysk Beyond launched on Arbitrum mainnet last week, riding the momentum from its recent trading competition that attracted over 4,000 traders. Rysk’s Dynamic Hedging Vault (DHV) reached its initial deposit cap of $1.5M within 24 hours of being open to the public. The DHV serves as the counterparty to the trading platform, which went live on Wednesday, July 26.

The highly anticipated options AMM has performed well so far. $582K in notional volume over its first 5 days is good for a comfortable 3rd place among options projects. Over this time period, Rysk has enjoyed an 11.4% market share of notional options volume on Arbitrum. Isolating Arbitrum volume is perhaps the best way to contextualize Rysk’s early performance, but it fails to consider the entire picture.

Despite the promising early numbers, Rysk has a long way to go to fully assert itself in the options space. Most of the projects discussed have a multichain presence and sustained usage over long timeframes. Even when extrapolating Rysk’s performance thus far to derive a 30 day volume projection, Rysk only has a 4% market share. This comparison is imperfect: Rysk Beyond’s 30 day volume is forward-looking, while other projects show trailing 30 day volumes. The above comparison provides useful context for the 5 day performance and a baseline for future comparison.

Rysk’s DHV joins Lyra’s Market Maker Vaults (MMVs) as the second delta hedged options vaults. Lyra’s MMVs have generally averaged around 6% yield. Rysk’s DHV had a mediocre performance during its alpha, operating around breakeven. Delta neutral options vaults are very hard to build, and the performance of the DHV will be an important indicator of Rysk’s trajectory.

Aevo, another new entrant to the options landscape, will soon join the frey with its own unique offering. Aevo is an orderbook style options and perps exchange on the Optimism stack. Its competitive advantage will likely be the ease of accessing options for small cap altcoins.

For now, Lyra is still the king of DeFi options. Moreso than any other options platform to date, Lyra just works. Lyra’s Avalon update has allowed it to command a dominant 70%+ market share over the past year. But the DeFi options competitive landscape is starting to heat up. Lyra, Premia, Rysk and Aevo are all taking divergent approaches with their upcoming releases.

Do you see any interesting advantages which may allow these other platforms to overtake Lyra at some point?

Lyra has a pretty big lead and for what the options space is right now, Lyra is ideal. Of the projects mentioned here, Rysk is most similar to Lyra. Best odds of beating Lyra is prob by having distinct approach. Short term, I think Panoptic could make a splash, but they are sort of in their own category of perp options. Panoptic wont have bid/ask spreads or expiries, which is where on chain options can't compete with Deribit atm.

Longer term, Premia is quite interesting. Premia v3 will have a fully collateralized settlement layer made up of concentrated liquidity. There will be a margin system and messaging network on top, allowing for a similar degree of capital efficiency you get on Lyra (which is 60-70% cash collateralized since Newport upgrade). What premia is doing is complicated and difficult. and it will certainly take a long time to fully populate a robust on chain vol surface with concentrated liquidity. It's a cool idea though, and if you assume an abundance of liquidity and demand for options (we obv. dont have yet, but is a good assumption long term) Premia v3 is a really cool way to structure an options platform.

Thanks for the insight Jordan! super helpful!