Today we are very excited to announce that Aevo OTC is officially live! Aevo OTC is the first platform that allows users to trade altcoin options on-chain, in size, with institutional grade liquidity providers. Aevo OTC uses an RFQ system with an on-chain dynamic margin system.

To start, users will be able to trade across weekly, biweekly and monthly maturities, on 13 different coins. The list of coins will be rotating every month depending on the most popular coins in the market.

The initial list will have the following coins, including Pepe, Sui, Aptos, Arbitrum, and others:

Altcoin Volatility Market

The current altcoin volatility market has long been characterized by fragmentation and opacity. Users looking to purchase altcoin options needed to onboard with multiple market makers and OTC trading desks. In addition to the tedious onboarding processes, for the few users who managed to onboard, they had to message each market maker to request a trade. After this, compare each price and conform to trading with margin rules largely in favour of the OTC desks. Lastly, margin rules were not transparent at all and handled over legacy systems like chat or emails.

Overall, the process has been both time-consuming and cumbersome. Aevo OTC allows users to have the same user experience, but execute on-chain against institutional grade market makers.

On-chain Margining System

Aevo OTC's margin system requires a 30% initial margin in USDC from liquidity providers, along with a dynamic variation margin system that prompts market makers to deposit additional margin based on the trade's mark-to-market value. All margin is securely locked on-chain.

In a post-FTX world, both retail and institutional traders are becoming more aware of counterparty risk that comes with various exchanges and trading firms. Aevo OTC ensures that the seller of the options are required to post collateral on-chain where everyone can see it.

Spotlight Trades: Early Platform Adoption

A number of market participants have already traded on Aevo OTC, expressing their view through different trades, amounting to a few million dollars of notional volume traded.

CoinFund traded crypto options with Galaxy for the first time on Aevo OTC (previously only trading bilaterally, settled off-chain). They decided to use the platform to benefit from advantageous margin requirements and on-chain payoff enforcement as well as being able to select a precise strike price.

Re7 Capital has executed the first APT option trade with Orbit Markets. This was a great opportunity to trade altcoin volatility on-chain for Re7, who recently launched their options desk, expanding their DeFi strategies to on-chain venues to provide liquidity for major and altcoin options. Orbit Markets, as a leading market maker continues to be a competitive liquidity provider on on-chain venues. You can read more about it here.

Initial Launch

To start, Aevo OTC will require a minimum of $10k notional volume and a maximum of $2.5million for ETH and BTC options, and a maximum of $1million for other options.

Roadmap: Exciting Developments Ahead

Going forward, our upcoming milestones include launching a secondary market, allowing users to sell options in addition to buy, adding more payoffs including exotic options as well as the ability to choose your counterparty and to customise margin requirements.

To start trading, visit the trading page here.