An Overview of On-Chain Options in DeFi

Options are financial contracts that allow investors to buy or sell an underlying asset at a fixed price on some set date in the future. They can used by investors for a variety of purposes including hedging risk, generating income, and leveraging positions. 

On-chain decentralized options can enable even more use cases as a critical component of the DeFi stack. However, while decentralized spot exchanges (e.g. Uniswap, SushiSwap, Bancor) and lending markets (e.g. Compound, Aave) have seen enormous growth, decentralized options have yet to gain significant traction.