Transcription
Welcome to the Edge podcast. I'm DeFi Dad here with Nomadic. Today's show features the co-founder of Risk, Dan. Thank you for joining us. How are you doing?
>> Doing great. Thanks for having me. Big fan of the Edge podcast. Finally excited to be here and it's like, you know, I feel I made it. You know what I mean? It's like, so thanks for having me.
>> That's awesome, man. Um, excited to talk to you too about risk. So, I've been writing up risk in yields of the week, this uh weekly column that I write for for a while now, honestly. And I think I think you've managed to package options in a way for people like myself. I call myself a retail user. Um that's just very intuitive. So, we're going to talk all about that. We're going to talk about the state of options in DeFi. Um what exactly is risk and what are you offering? Uh what will options yield mean for DeFi going forward? And then what's coming next with Risk? So maybe before we get into all that, Dan, why don't you you're new to the show. Why don't you introduce yourself a bit? What were you doing before Risk?
>> Yeah. So I'm uh the co-ounder of Risk and before that um started from the origin like my first job was uh investment banking. So I was doing corporate um Bank of America Lynch back in 2011 2012 something like that. I quit the job not finance did elective you know banking and bureaucracy out of it. Um and I started to build my own company. We we were building basically uh education software as a service in in Webure. I got excited about crypto about like 2016 2017. Um I was living in Berlin, Ethereum like you know you can imagine all the excitement around that and it was like to me it was like oh this actually you know I was a developer back then and it was like this bas to even do cooler stuff on finance right. So I kept working on my company but when it was about 2020 I realized okay this thing is too exciting right now like now you can really build like financial application banking stuff like that so co also came to Italy um I even knew that it was one of the worst place so I couldn't even leave my place so that was you know the perfect focus to to get into into crypto stuff and uh I was actually you know I I'm pretty sure I saw defi that tweet about open an options protocol and that happens after I got liquidated on on maker doubt. uh if you remember early 2020 that massive liquidation event I was like yo actually options are useful for like as an insurance year right so I got deep into open became very good friend with the team started to work with them and since then like I never left options and risk started around 2023 so it's quite a long time and the original idea was to actually build an options AMM using the open infrastructure so my deal was like okay I love open and now I'm trying to build something on top to bring liquidity to the protocol. So that's how I started risk. We we micro founder we met into the open discard which is one of those beautiful story that happens you know during those years and we started to brainstorm ideas and we we ended up building this um or at least the first version of what race case today
>> actually can we take a step back and just talk about the status quo for options yield in DeFi. uh what is that today and and I guess what is risk uh working to change and offer to its users in DeFi yield shouldn't come from chasing dashboards or timing markets. KPK runs non-custodial vaults and onchain funds built for stable riskadjusted returns. Capital is allocated across curated strategies and managed by automated agents that act within seconds under predefined controls. No custody, no manual intervention, just disciplined execution on chain. If you're allocating capital and want sustainable yield with stronger controls, visit kpk.io. DeFi investors are demanding better yield and Apex is delivering. Apex is the first dividend backed stable coin protocol bringing enhanced public market yield onchain. Backed by strategy's perpetual preferred stock, Stretch with APYUSD. Anyone can earn dividend driven real yield fully onchain live on Ethereum. To learn more, go to apyx.fi. In DeFi, most stable coins ask you to trust them. Trust the collateral. Trust the peg. Trust the managed risk. But noon proves it. The stable coin built for the highest yields, highest returns long-term with transparent reserves, real assets, and delta neutral strategies. Access real yields in real time. To learn more, visit app.ne.c capital/volts. Main Street brings the options box spread to DeFi, a proven delta neutral strategy paired with Accountable's real-time proof of reserves. MSY captures a multi-billion dollar source of trady yield and redirects it onchain. Institutional yield now built for everyone. To learn more, go to mainstreet.inance. Meet Alura, the vault where stable coins earn real yield, backed by hedged strategies like funding rate arbitrage, marketmaking, and RWA gold with trusted partners like Pendle, Merkel, and Turtle. Deposits are now live across six EVM chains. Start earning at Alura.trade.
>> to do a step back here end of 2044 um we were basically at that time we didn't have a product our product like the first B1 the you know the options amm didn't work out very hard to get users um so end of 2044 we were in that phase of like okay should we give up like you know we we tried it didn't work fail or we decided to basically focus into like a a role that we found into the system back then. So end of 2044 basically what happened is um the only way to access income from options so I'm talking about like option strategies or yield as as you mentioned it was only through sophisticated exchanges there were no easy way to access and basically what we realized is like products like you know I cannot give you a a list of all of them but like when you think about rebon or seda like all those type of product like ended up being shutting down for closing and and so on. And with my co-ounder J back then we were like options especially cover call and car secure boots are one of the most used strategy in thread five but also in crypto like we've been talking to most of the option desk out there most of like the you know foundation and so on and they were all doing this and we were like why there is not a way to do this in DeFi it's like that doesn't make any sense right and so looking back on 2024 our thesis was as simple as this is one of the main products and no one is actually doing it right now. why they're not doing and why the previous experiment like didn't work and what we realized is like all the previous experiment they were packaged as an ETF right at the end it was like an hedge fund he deposit as someone was running the strategy for you and usually it was very systematic or something like that and what we realized is like should we be like able to build a product which is in the middle between that ETF where someone is running the strategy with you for you but also in the middle between the purely option exchange with all the quantum accident and the sophistication. So the idea is as a user you should be able to select your strike price, your expert, build your own custom product here. So it's not someone else doing for you, but you should be able to do that very easy in one click like in a way that you understand exactly what's going on without being like an option, right? And that's basically what where the space where when we started to build this new product that we call RB12 and we launched about a year ago now.
So what is the status today? This product that you know we launched a year ago now is working. Um we got right now I think we have like 60 million TVL and for us TVL is is a very interesting metric because at expiry we set all the position and we send money back to to the to the user. So every Friday our TVL is going like back to low level and then we know again. So basically 60 mil means that this TVL that we accumulated basically in the last like two weeks or so. Um so that's pretty impressive. Uh at least for us you know coming back that a year ago we didn't have a product. Um the product is working. We you know we have users we have 90% retention of funds. So every Friday we have um basically 90% of the funds that get back are from existing users. So our users love the idea to roll over those position with your new terms and so on. So back to your original question what is the status today? Like today a product like risk is probably the easiest accessible way to build a strategy that generate yield or income out of options in a very easy way. There are alternatives. Yes, you can use you know option exchanges but usually with those product there is more complexity there is less flexibility and when I say flexibility is not in terms of like strides or experts but for example in terms of assets with risk you can use any collateral we have we even have cover fund like you don't have that on that you know what I mean so there are things that we design the protocol specifically for this use case. So the status today is if you're looking to generate income from cover and care secure puts risk is the the product that is optimized and designed just for that use case. There are other products that are more generalizable and then you know you you can get there or the third way to do that today is going to OTC. So you call a desk you know winter mute galaxy whatever and you can basically trade with them. The issue with that is like it's not that accessible obviously plus most of the time you need to send your collateral so you have a massive counterparty risk obviously with interview galaxy that will gray like they're not going to blow up but like there's still this you know it happened with Alam in the past right so you if you don't want to take that counterparty risk and you want to do something very accessible risk is the play to to do something like that
>> so Dan you're you're starting to sort of touch on the actual offerings and the nuts and bolts of how risk works Something I've written up in Yields of the Week is these cash secured puts. Uh I I think they're just really interesting, especially for the market that we're in right now. Um I actually think it's like a potentially cool way to maybe uh dip by. But if you could pull your screen up and maybe walk through one of these cash secured put scenarios and so people can kind of see the yields. Uh that that would be awesome if we can just uh put a picture to this.
>> Yeah. Yeah, let me do it. So cash puts is a is a funny story because when we launched the product we only had covered calls and then a lot of users have been asking for cash puts. So it's basically like a communitydriven thing. So cash secure puts the way they work is you deposit a stable coin and you decide which asset you want to buy at a cheaper price. So as an example like you know you see my screen here we have I BTC E or Soul. Let's go with IP and I'm going to select USDH the native stable coin of Hyperliquid. So what happened with Risk is like we keep the UI super simple. So this doesn't look anything like you know an option exchange that you might be used to and that's kind of like the innovation that we brought to the space like we try to simplify this process and we ask a simple question which is which price you are happy to buy in this case I on for example May 1st which is in 15 days now we show already six prices now so six strike prices so I right now is at 44.32 so let's say you're willing to buy uh 40 and you think that's a good price, basically what you can do, you can deposit uh the stable coin in this case USDH and you're earning 45% right now um which is the premium that you get up front. So in this case you're going to get $40 deposit in 2K and analyze is 44%. So the APR is purely the premium that you get up front analyzed. Um so you deposit, you receive the premium up front and then this is what we probably focus a lot when we build the product to say what happened on May 1st. May 1st expir day there are two scenarios there. One is the price is below of what you selected which is for 40 4050 and you basically receive in this case 50 I right so effectively you are buying 50 I at 40.5 if the price is above that you basically get your collateral back and in both cases you obviously keep the premium so users are doing the strategy right now and this is the main strategy always like I think it's almost 60% of TVL is cash secure puts on sorry on BTC and IP And the way users think about this is as simple as I looking for yield on my stable coin and I'm actually willing in the long term to hold I for BTC. So I don't mind if the price dump and I'm going to buy it but in the meantime I'm trying to collect yield out of this on stable coin. So this strategy got very popular recently and it's again our main strategy and it's very even simple to understand and the fact that we made this physically settled enables the user basically to do nothing in the sense and like expert is going to receive I if the price is below that or is going to just receive USDH in this case or you know stable coins back. So this is again one of the main product right now and the main reason that this product took off is also because yield in defy compressed a lot and having in this case for example 45% uh APR which is purely based on you know income generated from volatility it is a very good opportunity into this market. So yields are are low, volatility is high and it's actually a very good product to earn out of it. Cover call just to give you an idea. I'm not going to focus a lot into that but like cover is the other way around. So you deposit for example IP and what happen in the case is you are willing to sell an IF price. So in this case you deposit K I you're willing to sell a 48 and you receive the premium up front and then on May 1st if it's above 48 you're going to receive USDT. So, it is a take profit type of product. If it's below that, you get your collateral back, which is hype. That's simple.
>> Dan, thanks for walking us through that, man. Um, it's like it's so simple and I mean that in a good way. Um, but it's like also very powerful. Um, I So, as you were kind of explaining that too, I was wondering, do you think the cash secured puts have been so popular because we've been in this like bearish market regime? we're, you know, arguably, I hope, near the bottom and people are again starting to use uh the cash secured puts for maybe dip buying. And then I guess conversely, do you think in a different market regime or maybe what type of market do you think do you think covered calls covered call buying would kind of take over and overtake the popularity of the the cash secured puts just in a different market?
>> Yeah. Yeah, that's um so that's a good question. Like I I have a partial answer based on what I see from users, right? Um so on secure boots you're right like right now on certain asset people are willing to buy them because like BTC and I for most of the people like they are good asset and they okay to all those assets over time. So in a bare market that's actually a pretty good strategy. They try to buy the deep. In the meantime, they have cash in in stable coins and they try to hold stable coins, right? What happened in a purely bullish market where probably people don't even want stable coins and you know they're just purely leverage like that's something that cover might be interesting on certain assets. For example, what I've seen is like on BTC people like to do cover call because it's kind of like the movement are somehow expected. I don't know what to say like you know it is like you know that it's not going to do like a 20% pump on an overnight right with BTC now um so on BTC for example cover is actually a very good way of earning out of certain assets but in that case the psychological mindset is slightly different like on the circuit boards I've seen people that they wanted to get exercised like they wanted to buy the high chipper when it comes to cover is the opposite way like people don't want to get exercised so when it comes to cover the call the the psychological aspect is I'm making a bet that that price doesn't eat so BTC is like a 75 I don't think it's going to be 80 I'll I'll get into 80 so I think what happens like what changes there is like people get more into the speculation aspect when it comes to like the especially the cover but on other asset users are actually okay to sell um keep in mind that some of our users are funds for example they have liquid funds they have assets and they're like okay I'm fine to sell at that price it will be above the my entry price and so in the meantime I'm trying to earn this income but if I sell at that price it's fine for me I guess it all depends from us like if you ask to anyone in the IP community no one probably want to send I here and like on the cover call all of them they're trying to do this like I'm speculate that is not going to hit that point um if you ask Ethereum like and that tells you a lot about where you where the sentiment is today. Well, like I'm I'm fine to sell at 2.5K. You know what I mean? So, I guess a lot depends from asset and and and where you know the momentum. One thing I haven't mention is it also not depends from volatility. If volatility is high, obviously like you get paid very good premium. So, where it all depends like what where is the level of volatility and what premium you're gonna get for entering that trade. That's at the end of the game is what matters like is the PR exciting enough to sell IPA 45. That's the end. That's basically the that's basically it. But again, different users, different use cases. Funny enough, we just had Nick Forester, the uh founder CEO of Derive, and we were asking him about, you know, with all the success that Derive has been having in terms of uh trading volume on the on their decentralized options exchange, uh what's the outlook for someone to build vaults um or to like make uh buying options easier, buying selling options easier? So, um it seems like you would be complimentary, I guess, like do you see yourself as potentially competitors or again like are are you more uh potentially partners to uh an exchange like derive?
>> Yeah, so that's a good question. Like if you you know I know Nick and I met him like uh was like a month ago. we had a dinner and so on. And the view when when we think about this is like we've been into like together into this industry for like so many years and we've seen options basically like struggling all the time, right? So if you ask both of us all we care is that we want options to to grow like we want this bike to grow. Like we we have two completely different approaches like for them it's like they're fighting that a bit and that's fine. For us it's like we're not trying to fight that a bit. We are trying to actually give a very simple use case out of options which is generating income. Now what we are trying to do is we trying to focus a lot into like composibility having many asset like you know when I show the screen share for example you can use you can do a cover call using like three different type of staking asset on IP. So we took the approach of saying like everything we design is purely I have an asset I'm trying to run on top of it. It's very simple with those two option strategies. An option exchange is is completely different like even the people that you targeting is like sophisticated actors you targeting like people actually that want to enter a trade and you know it is a completely different different best. Um obviously like some things can be done on both platforms but like that's the what I would say is like we have users that for example this is something to me really interesting when we started this new product we were doing user testing and most of the people they were like I'm not going to touch an option like I tried in the past didn't work I got burnt like we figured out that there were like a negative bias when it comes to options so we had to make an insane job of saying like we to oversimplify this. And if you go to our UI, we don't even mention it's an option. Like, and that's on purpose because people had a negative B. It's like, I'm not going to touch options. Probably more than half of our users, it was the first time that they were doing an option trade was with risk. So, if you ask like what is the point of risk, it's like accessibility. We're trying to make this very easy for people that never touched an option. If you're doing an option exchange, probably your target is completely different. you're targeting the sophisticated users. You're targeting the one that want the most flexibility out of it. So I think it's like yeah there is basically what we're trying to do we're trying to make options mainstream and I think if no one was able to do that in in defy probably reborn with the vault system which at the end of the game was a poor design product because it was losing users money over time and so like I think what we're trying to do is that we're trying to fix that with a an evolution shop that product which is an hybrid between an exchange and like an option strategy But we're trying to make that mainstream. We want everyone to be able to enter a trade and know exactly what happens and when. That's like basically what we're doing. And I think so far that's what our users liked about our product.
>> Yeah. Really interesting. I I find when you talk to people that have traded options like all their life, they talk to you like, "What do you mean you don't get it?" You know, it's like what? It's so easy. Like and and it's it's kind of annoying because I think there's definitely this like fear of options for people that haven't really dabbled in it. So I'm actually not surprised to hear that like 50% of your users this was their first kind of fora into options and I I didn't even know that you don't mention the word option on the site. That's that's that's interesting as well. I want to just dive a bit more into your users though. Um I'm assuming there's a lot of retail users like like myself like like DeFi Dad, but um I guess are there people that you would say are more sophisticated users as well on the platform? Is there liquid funds? Um yeah, what what is kind of the overall makeup uh of of your users on risk?
>> Yeah. So that's some sort of like misconception about our products like people paying this purely retail people that they that don't know what they're doing. Um in reality most of our users are whales um defi users. We have liquid funds. Um we built a product on top of race that we can we can talk about it even later if you guys want but like it's basically a vault infrastructure and the first user of that is actually Ionium defy which is um a treasury on top of hyperlquid and it's a NASDAQ list identity so it's like we're talking about purely institution um we have a few more coming like on the institution side so we have actually institutions running those strategies um so the the average user Like for example, even the minimum position that we have ever risk is actually 2K. So it's not high. It's not insanely high, but like we don't have user that they're trying the product with $10. Like the minimum is 2K. So yeah, it is retail in a sense that our users are I would say DeFi users, power users, but not the retail in a sense like you know the the pound fund traders like that's what I'm trying to say. Um those are like our main users. They're people that they have assets. Sometimes they are sophisticated in terms of asset they have like at some point we even enable pendle ki token as collateral because user were asking because they were using pendle. So imagine like we have users that like coming from pendle they had the asset and they realized that they could use that as collateral risk and they wanted that integration. So we are actually talking about like users that they know the main difference is like they're not probably it's more of like they don't want to spend too much time trying to understand everything about the options for them it's as simple it's like okay I know what happened and at that case right so at the expert on May 1st the price has to be below upper that's all I care I don't need to care about anything else so I would say there are users that they are sophisticated somehow again we are liquid funds And for them like it's like they just don't want to be there and like thinking about the you know Greeks and so on. They just want something extremely simple. And right now they're doing that with OTC desk. And OTC desk you call them on Telegram and you ask for a price. They give you the price. If you like the price you send them collateral and at the end of the trade they're going to call you back. It's like oh here's here's your collateral back. And basically we made all the process of you know onboarding using telegram and sending collaterals and blah blah blah. We made that in a single bottle in a single UI. That's basically what we've done here. But yeah, I mean we I before this I was actually having a call with a treasury and they took the calls from their treasuries and they were looking for an onchain venue. So not the probably yeah I mean we're not talking about the high level of sophistication but people that do treasury management. So yeah those are like our users today.
>> Very cool. Um Dan I want to ask you about something I saw on on X. So I saw some people trying to analyze uh the difference between sort of risk and derive and they were making the case that they think the premium on risk is way higher and you know kind of this like um maybe more sophisticated options um type of persona I was talking about earlier where they're like why don't you just do this yourself and honestly it first of all I want to know if like you think that's true if there is like a spread and and maybe what it is or maybe where you take profit as well would be good to talk about, but this whole conversation sort of reminded me about Athena and people like like veteran traders saying, "Well, why don't you just do the basis trade yourself? It's easy." And for a guy like me, I'm like, "No, like I'm just not like I would much rather get it through Athena." And I don't know if that's like a a fair comparison, but um yeah, would like your take on that. But then also, yeah, how does how does uh risk make money? And is there any validity to, you know, having like a bigger spread from derive or something like that?
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>> Yeah. Yeah, know, thanks for bringing this up because it's um you know it's been discussed a lot and uh generally like we we are builders and we just you know like to build. So we take all of those you know discussions as a feedback, right? Um and so and then we we converge and like okay we need to improve or or build better. Um what happened is like you know a risk works with uh it is an FFQ system. So at the end of the game what we have like when you click the bottom before that you know the strike price on the UI that's actually a two seconds option. So we have a few option desk on the other side and they price the option on the fly and as you can imagine like pricing an option and within two seconds it means that you know those guys have built in their own like volatility infrastructure they'll you know the the volatility surface and and everything like that. So the thing about premium when when I see someone say oh risk always going to have worse premium it's like to me doesn't make any sense because at the end of the game it's all about like if we are able to on board desk and market makers and traders on the on the Q it's like it's just an NFQ system right so there's no structural reason or design at the proto level that we shouldn't have good premium and so that's like some misconception to me that I was like you know when I was reading those those things I'm like okay that doesn't make any sense because again we are operating as an exchange here so it's all about like can we attract the liquidity right and on attracting liquidity a bit of background like when I mentioned you know 2024 3 product we had this idea we built the product and I reached out to most of the market makers I know and I was like hey we're building this product you guys should integrate and as you can imagine the reply for all of them was like no option don't work we're not going to waste our resourc here. So it was very hard to even get like a single market maker to be like let's try this together at least like I have I believe we are into something like I have a thesis right. So what happened is since then we've been growing insanely like we we launched in June and we were doing like one month volume like sorry 1 million volume per month because everything was gated in March we've done 180 million. Now imagine like growing like this and making sure that you have enough you know market makers on the other side. It means and we've done that completely organically like we didn't do anything on the market maker side like we didn't pay any market maker. We don't have any insider deal. We don't have any liquidity deal like nothing like that. So the thing is it takes time to build up all this liquidity. But what happened is when actually like you know the Twitter discussion as you can imagine people say okay you can basically there's an arbitrage right there. So the smartest market maker reached out to me the same day and they were like guys is this true like is is there an arbitrage there? I'm like, well potentially because obviously like on certain asset and again if you do cherry picking like probably you can find some you know for example sometimes we you know our market makers price better on on the on the wings or whatever but like it happens like you that's like any change right um so what happens like the actual market maker realized that they were an opportunity to arbitrage and they integrated and basically in a span of a three days or four days like they even complained like oh arbitrage is not there anymore. And now the prices are again aggressive and competitive. So the TLDDR of the SSI there is no reason from a design perspective that our premium are not better than others. And that's actually our goal. And back to your question like how do you guys make money? We take fees on the premium. So having a higher premium means that we get more users means that we get more fees. So there is no reasons for us like to not having the goal of having higher premium. And my job like today, you know, just going podcast obviously is one thing, but like my main job today is like making sure we attract all those decks, all those market maker to quote in our organic environment like you know we yeah we can pay one market maker with a retainer fee and be like okay go out there and pricing but that's not a sustainable model that we didn't want to build. So it takes time we get there. Um, back to your example like about Athena, there is definitely something there as well. Like obviously some of our users, they know that if they have to leave like some beeps on the tabletop for every like an easier UI or a two seconds option on the fly without clicking one like only one button, it's fine for them and they're happy with it. Or like the composibility aspect you can use any collateral like on Hyperlid at some point we had LI which is collective. we enabled that as collateral and 60% of that collateral was actually used on sorry 60% of the supply of LI we was using to risk as collateral so there are a lot of reasons like if you are a user of LII back then it was one of the coolest product to earn on top of it right so there are reasons for having a few pips but in reality from a purely product and design perspective like we will get to a point where our premium is as competitive as anything else and that's my job and my goal and like basically what I'm what I'm building here.
>> Yeah, I have always wanted to use options more than I do in my portfolio which is uh very rarely and part of the obstacle to to using those options has just been I I just am not expert enough to do so. I don't trust myself not being more expert, not having traded options. And I I think like this is such a great example of, you know, finance automation, but also on the front end. Like I recognize the way you've packaged and productized the ability to sell options um through risk. It just it makes it psychologically make more sense. it puts you at ease like understanding how do I align my goals and my portfolio uh versus the option strategies that support it. So I would encourage anyone if you just go to risk.inance finance. It's risk with uh R YSK. Uh you can just click around and you can quickly see like oh okay so I'm I'm basically being guided to you know when do you want to buy when do you want to sell an asset and based on that you can potentially then get into an options strategy. Highly recommend if you've never traded options um again be extra cautious read the docs and so forth. Take extra time to learn. Hopefully the podcast helps. But um uh this is definitely one of the uh uh last times more recently that I've like really wanted to take action with like a protocol following the podcast. I I feel like there's um yeah, there's real opportunity here for me to actually use risk myself. So that said, Dan, uh what else is on the horizon? like what should we look forward to in the next 6 to 12 months in terms of uh risk products.
>> Yeah, that's um so our approach is always very like we talk to users see what's going on and we try to evolve into that. We have some products that we've been like cooking and testing that are you know basically ready. So the the plan right now is is basically increasing the distribution right our thesis as you know I mentioned multiple times that we're not risk is not a product for options traders it's actually a product and that's the innovation like it's a product for anyone else that want to use options in a very easy way right and based on that we started to get demand for example from institutions um I don't know if you guys saw like I think yesterday Goldman Sachs announced for like an ETF that is basically doing cover on BTC Right. And we've seen this basically in the last couple of months. We done the first one with with opinion as I mentioned. We had a few coming. So we have this product which is effectively very similar to you can think of like more folk duration bolts um in a way where anyone can run his own vault. Some of them are permission. So if you are an institution today like the my dream right here is like common actually use the risky infrastructure for that right we we build infrastructure. It's ready. So that's like you know kind of like long-term plan but like basically what we have right now we have other protocols we have foundations we have treasuries we have you know some institutions that they using this infra with all the dynamics that they need sometimes about compliance sometimes about white listing counterparty so actually risk is also getting into like an institutional side of it you don't see from the app like from the app is it looks like very you know very easy as I said but like behind that there's actually a big institutional product. Um we are exploring actively and we already built um a UI and we're trying to do more uh for example HP4 on hyperlquid. Um HP4 I think is you know it's going to be prediction outcomes and bounded options. So I think it's all align with our community. So if it's going to be similar to HP3 with like permissionless markets and so on that's something that we'd be very happy. We definitely have the skills and the community to potentially build around that. We are thinking about what other structure product and instruments can be at related to this because again back to the original thesis of we using options to generate an income right that's all about risk and there are many ways of doing this with options. So like what we see with cover maker secure pools is just like you know just a small amount of the options that we can give to the user. So we are expanding into that. But the last thing and that's something that uh you know it was at the beginning like a decision that we made and we really believed into that is like we designed the protocol to be composible. So if an asset is on chain you should be able to run the strategies on top of of of risk and now we are targeting like gold for example is the next one like in pipeline we have testing and as we speak so you can do cover on gold we do tokenized stocks. But yeah, the idea is like if there is an asset our platform is flexible and composible enough to let you like do cover core or cash secure puts on top of it. So increasing the number of asset increasing the number of products increasing the distribution in terms of like institutional with you know those potentially like ETF yield max type of product. That's the direction that we're taking and the most important thing as I mentioned before is we're just trying to get more and more liquidity. um because that's the that's the key for effectively having like a killer product. If you have, you know, the best premium out there and all the assets and and everything like that like it's to me it's like we I'd be very happy and again um two years ago we were completely dead and the fact that right now I'm discussing about this road map and we are alive and and so on, it's like you know something I'm very proud and we're going to keep shipping and building as with that.
>> Yeah, what an awesome story. uh your pin tweet shows the uh TVL and risk rocketing upwards from July 2025. We've seen so many other builders attempt to uh make options work in DeFi and I think we were just too early you know years ago we we were talking about the fact that were you working at open at that point? I was working with them 2020 but I started because I was using them as an insurance my maker D liquidation basically. So I started because I found a use case and then I love the product and I joined the team. They were such a great team but they were battling you were battling there against the the Gendler era and now things have changed. We have much more pro- crypto regulation and options are such an important primitive for us to bring on chain and this interview combined with what we learned from Nick Forester at dive. I I wholly believe in it. I I think 2026 is going to see options trading volume onchain grow options open interest grow and we're we're just really excited for the work that you guys are doing. So I want to remind our listeners that they can learn more about Risk by going to risk.inance. That's risk with a Y. Uh you'll find that in our show notes. You can follow Risk on Twitter. It's, uh, risk finance. And then follow Dan's personal account. It's Dan Defyed. And we'll put that whole handle also into the show notes. Dan, thank you so much for your time. again. Congratulations on making Defi Options great again and we want to give you the final word before we go.
>> Oh, thanks for having me and know I know about you closely like make DeFi options great again because I think I made the tweet like a couple of years ago and we're like literally at the bottom of our product. So it's like yeah I think it just remind me of that. I was like okay I think we done something into that but there's still a lot to do. And so hopefully it's the is the right time and um again we I think we tish in a way that users at least right now they're not scared about them anymore. And that's already like the first step. Thanks everyone for tuning in. To stay up to date with future episodes, plus get expert tips, strategies, and exclusive content. Subscribe to our free newsletter at the edgeedge.xyz.