Conclusion

After in depth analysis, the solution is to customize our hedge structures and valuation models, and find something that best fits the erc20 market.

This method is not ideal for pricing options considering the volatility is very high for ERC20 tokens, thus rendering the cost insignificant compared to the potential profit.

Neon Protocol resolved to instead allow users to use OTC prevailing rates to price a premium for a hedge they write, options demand and token trend will be factors.

In our case the goal of creating erc20 options is to:

• provide hedging tools for investors to manage risk

• provide speculative opportunities for traders and farmers

• leverage capital for more gains

• lock in profit on assets

This requires the premium on deals to be significant enough not negligible, it benefits noone in a free market.