MYSO is a DeFi protocol that gives users access to tailor-made onchain structured products. The protocol allows users to write call options (commonly known as "covered calls") as well as cash-secured puts across a broad range of assets, with fully customizable option terms. This way users can earn attractive upfront cash premiums, effectively monetizing the volatility of their holdings.
Founders, angels, and whales can use MYSO to write call options on larger (vested) token positions, allowing you to generate liquidity from your holdings without selling. By writing a call option, you can commit to potentially selling your tokens in the future at a higher price (known as the strike price) if the token price appreciates accordingly. Otherwise, you can retain their original tokens. Regardless of the outcome, you receive the option premium upfront, making call writing an attractive tool to unlock liquidity from otherwise idle tokens. MYSO enables you to obtain tradeable quotes across various trading firms and efficiently get matched onchain.
Treasuries can write call options on treasury tokens to generate stablecoin income while maintaining flexibility in your token holdings. This approach allows you to strategically divest tokens into stablecoins, but only under favorable market conditions—selling automatically when prices rise while retaining your tokens if prices remain stable or decline.
Alternatively, treasuries can use cash-secured puts as a structured way to conduct token buybacks. This involves committing stablecoin reserves to repurchase your token at predefined prices (e.g., 20% below the current spot price). If the token price remains above the strike price, you retain your stablecoins; otherwise, you acquire your own tokens at a discount. In return for this commitment, you receive an upfront put premium, effectively earning yield on your reserves.
VCs can leverage call writing to generate immediate liquidity from vested token positions, enabling you to free up capital and strategically capitalize on market peaks by selling calls at opportune times. Similarly, onchain asset managers can incorporate both call and put writing as part of an overlay yield strategy to enhance returns on your managed assets.
Options are derivatives that give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price before or at a specified expiration date.
Options come in two main types:
Call Options → The right to buy an asset at a specified price.
Put Options → The right to sell an asset at a specified price.
Every option contract has:
A strike price (the agreed-upon price for the transaction).
An expiration date (when the option expires).
A premium (the upfront cost paid by the option buyer).
In-the-Money (ITM) → The option has intrinsic value (e.g., a call option with a strike price below the current market price).
At-the-Money (ATM) → The strike price is equal to the current market price.
Out-of-the-Money (OTM) → The option has no intrinsic value (e.g., a call option with a strike price above the current market price).
✅ Earn Yield: Selling options generates upfront premiums as income. ✅ Strategic Exposure: Traders can take positions on price movements without directly buying or selling assets.
Options are widely used in traditional finance and DeFi for yield generation, hedging, and capital efficiency.
A covered call is an options strategy where an asset holder sells a call option on their asset while still owning it. This allows them to earn an upfront premium while potentially selling at a favorable price if the option is exercised.
1️⃣ Hold an asset (e.g., 100 ETH) 2️⃣ Sell a call option at a higher strike price 3️⃣ Earn an upfront premium for selling the call 4️⃣ Two possible outcomes:
If the asset price stays below the strike → Keep the premium and retain the asset.
If the asset price rises above the strike → The asset is sold at the strike price, but the premium offsets some opportunity cost.
Scenario: Alice holds 100 ETH ($3,000 per ETH). She sells a 30-day call option with:
Strike price: $3,300
Premium received: $200 per ETH ($20,000 total)
🔹 If ETH stays below $3,300 → Alice keeps her ETH and the $20,000 premium. 🔹 If ETH rises above $3,300 → Alice sells ETH at $3,300 but still keeps the $20,000 premium.
✅ Earn passive income on idle holdings ✅ Hedge against small price drops ✅ Strategically sell at higher levels
⚠️ Limited upside: If the asset price surges, you still sell at the strike price. ⚠️ Obligation to sell: If exercised, you must deliver the asset.
👉 Who Uses Covered Calls?
HNWIs & Whales looking for passive yield.
Treasuries generating stablecoin income.
VCs & Asset Managers unlocking liquidity on locked tokens.
MYSO enables on-chain covered call execution with custom expiries & strikes.
A cash-secured put is an options strategy where an investor sells a put option while holding enough cash (or stablecoins) to buy the asset if the option is exercised.
This allows: ✅ Upfront income from the premium ✅ Strategic asset accumulation at a discount ✅ Potential yield stacking when using yield-bearing stablecoins
1️⃣ Hold cash/stablecoins as collateral (e.g., 100K USDC) 2️⃣ Sell a put option at a lower strike price 3️⃣ Earn an upfront premium 4️⃣ Two possible outcomes:
If the asset stays above the strike price → Keep the premium and your stablecoins.
If the asset price falls below the strike → Buy the asset at the pre-agreed strike price (cheaper than before).
Scenario: A treasury wants to buy back $500K worth of its token but only if its price falls by more than 10% in the next 30 days.
Strike price: 90% of current price
Premium received: $13,700
🔹 If the token price stays above the strike → Treasury keeps $500K USDC + premium. 🔹 If the price falls below the strike → Treasury buys tokens at the agreed price using the USDC collateral.
✅ Generate yield on idle stablecoins ✅ Buy assets at a discount ✅ Stack yield with yield-bearing stablecoins
⚠️ Obligation to buy the asset if the price falls below the strike. ⚠️ Stablecoin collateral is locked until expiration.
👉 Who Uses Cash-Secured Puts?
Treasuries executing cost-efficient token buybacks
HNWIs & Whales looking to accumulate assets with yield
Funds & DAOs optimizing capital deployment
MYSO enables on-chain cash-secured put execution, allowing treasuries and funds to earn yield while executing strategic buybacks.
The MYSO v3 architecture is optimized for permissionless and customizable on-chain settlement of covered calls and cash-secured puts. The protocol consists of two core contracts—the Router and Escrow implementation—along with modular peripheral smart contracts, i.e., the Oracle Adapter and Fee Handler.
The Router contract is the primary interface for users to interact with the MYSO v3 protocol. It handles:
OTC/RFQ Matching: Allows for OTC and RFQ matchmaking.
Auction Creation: Deploys an escrow contract to store underlying tokens and initiates a Dutch auction.
Bidding on Auctions: Allows users to bid on live auctions, determining the premium price dynamically, using oracles.
Exercising Options: Handles option execution based on market conditions and oracle data.
Borrowing and Repaying: Enables users to borrow against locked collateral and repay to retrieve collateral.
Swappings: Allows swapping of option tokens and generic ERC20 tokens.
Fee Handling: Routes fees to the designated FeeHandler contract for revenue distribution.
Key Features:
Deploys new Escrow contract instances using OpenZeppelin's Clones.
Implements anti-replay mechanisms by tracking used quotes and swap signatures.
Supports EIP-1271 signature verification for -chain signed quotes.
The Escrow contract is a minimal proxy instance deployed by the Router for each auction or RFQ match. It:
Mints Option Tokens: Mints option tokens to trading firms, representing calls or puts.
Handles Option Settlements: Manages option exercise and facilitates underlying token transfers.
Supports Borrowing: As an optional features, allows borrowing against locked collateral tokens with predefined limits.
Access Control: Escrow contracts are Ownable, with the option writer designated as the initial owner. The escrow owner can transfer ownership to third parties and withdraw any tokens from the escrow (including airdrops) once the option has expired.
Implements Governance Hooks: Supports voting delegation for governance tokens.
Key Features:
Implements Dutch auction pricing via time-based decay of premiums.
Uses a modular oracle system for dynamic settlement calculations.
Supports on-chain and off-chain voting delegation for governance participation while coins are used for option writing.
The FeeHandler contract manages fee collection and distribution. It:
Collects fees from option matches, exercising, and borrowing.
Distributes fees to protocol stakeholders and referral partners.
The OracleAdapter module provides real-time price feeds for:
Auction settlement pricing.
Exercise price validation.
The protocol uses RedStone Oracles as the primary solution for crypto assets pricing. RedStone is a Modular Oracle that delivers frequently updated, reliable, and diverse data feeds in a few models.
MYSO V3 provides different ways for users to get matched in the options marketplace. Each method is designed to cater to different needs, ensuring flexibility and accessibility for various participants.
In this route, users can negotiate option writing terms with institutional trading firms via Telegram or other messaging platforms and then use MYSO V3 as a trustless settlement layer. The trading firm can provide tradeable quotes to the given user through an off-chain signature.
This off-chain signature, combined with a payload representing the corresponding option, can be shared via a shareable link. The user can then submit this data on-chain to initiate the trade seamlessly.
This method allows users to sell upside on their tokens by initiating a Dutch auction. The process works as follows:
The call option is initially offered at a high relative premium (i.e., relative to the notional value).
Over time, the premium gradually decreases.
Market participants can monitor the auction and place bids when the premium aligns with their target value.
Because option terms such as strike price and premium are quoted in relative terms, this matchmaking method is particularly useful for DAO treasuries. Given the time constraints associated with DAO governance and voting, quoting in absolute terms may not always be feasible.
Note: Dutch auctions require on-chain oracles for accurate price discovery.
With the RFQ (Request for Quote) route, users can request quotes for various option configurations from institutional trading firms. The process is as follows:
Trading firms respond to these requests and make offers using off-chain signatures.
Users can accept a quote by submitting the received signature on-chain for settlement.
Unlike the Dutch auction method, the RFQ method quotes option terms in absolute values (i.e., absolute strike price and premium). This allows for matchmaking without relying on on-chain oracles, making it a robust and flexible solution.
Regardless of the matchmaking route, all transactions in MYSO V3 are settled atomically. This means:
The user's underlying tokens are locked in a segregated escrow account.
The escrow contract simultaneously mints an ERC20 option token for the trading firm.
The option premium is transferred from the trading firm to the user, with a portion deducted as a protocol fee (if applicable).
The matched trading firm receives an ERC20 token representing the option position, granting the holder the right—but not the obligation—to acquire the underlying tokens at the specified strike price.
Depending on the option configuration, various post-settlement scenarios are supported. These may include:
Allowing the option writer to retain voting power over the underlying tokens.
Enabling the option holder to borrow and repay underlying tokens for hedging purposes.
MYSO V3 provides users with multiple ways to get matched, ensuring a dynamic and efficient marketplace for decentralized option trading.
✅ Key Benefits:
Generate passive yield on idle assets
Retain asset ownership unless the strike price is exceeded
Strategic selling at favorable market conditions
Treasuries can generate instant stablecoin income by writing covered calls on idle treasury tokens. This strategy allows them to: ✅ Earn upfront stablecoin premiums ✅ Retain control over tokens unless market conditions justify a sale ✅ Align value realization with favorable price movements
Example:
📌 A $10M WLD covered call with:
30-day expiry
110% strike price
$200K upfront premium received
🔹 Outcome Scenarios:
If WLD remains below the strike price → Treasury keeps WLD tokens, and the option expires worthless (out-of-the-money).
If WLD surpasses the 110% strike price → Treasury sells WLD for $11M in USDC (in-the-money).
🔹 Key Benefit: Treasuries monetize idle holdings while retaining control in sideways or falling markets.
Treasuries holding USDC (or yield-bearing stablecoins) can sell cash-secured puts to execute cost-efficient buyback programs.
Example:
📌 A treasury wants to buy back tokens using $500K USDC if the price drops more than 10% in the next 30 days.
🔹 Outcome Scenarios:
Treasury receives a $13,700 premium upfront.
If the token’s price does not drop >10% → Treasury keeps its USDC and pocketed the premium.
If the token’s price falls below the strike → Treasury buys tokens at the pre-agreed price.
🔹 Capital Efficiency Boost: Using yield-bearing stablecoins as collateral enables treasuries to earn both stablecoin yield and option premiums simultaneously.
VCs and large investors can write covered calls on locked tokens to unlock liquidity without violating transfer restrictions.
✅ Key Benefits:
Unlock liquidity while complying with vesting schedules
Earn upfront option premiums
Enable over-the-counter (OTC) matchmaking via perpetual hedging
Example:
📌 A VC holds $10M in vested WLD tokens, unlocking in 180 days. By writing a covered call with:
180-day expiry
50% strike price
$4.95M upfront premium received
🔹 Outcome Scenarios:
If WLD does not fall by 50% in 30 days → VC receives $5M in USDC (in-the-money).
If WLD falls below the 50% strike → VC keeps their WLD tokens (out-of-the-money).
🔹 Execution Possibilities:
Even if underlying tokens remain locked, trading firms can hedge exposure via perpetual futures.
Depending on the vesting structure, settlement can be on-chain (via smart contracts) or off-chain (via escrow + legal agreements).
Asset managers looking to diversify income sources can integrate covered calls & put writing into their portfolios.
✅ Key Benefits:
Enhance yield across different asset classes
Earn stable premiums while managing risk
Deploy structured options strategies for capital efficiency
MYSO’s platform enables asset managers to customize expiries, strikes, and premiums, creating bespoke strategies aligned with market conditions.