Building the Infrastructure for Onchain Volatility Markets | Dan Ugolini (Rysk) at ETHConf

Sun, Aug 2, 2026, 12:00 AM

In this talk, Dan Ugolini, co-founder of Rysk, explains how his team is building the infrastructure for onchain volatility markets after years of learning why options historically do not work in DeFi. Having spent five or six years obsessed with building options, he came to agree with the common pushback that options do not work in DeFi, because each approach faces hard challenges. Order book exchanges like the perps model need a separate order book for every strike, expiry, and asset (hundreds of order books versus one for a perp), so only a few stay liquid and liquidity costs are high. Options vaults packaged systematic yield strategies but were too easy to front run and mostly died. OTC trading through option desks works but is opaque, gated, and manual, much like TradFi. Rysk's own beautiful but complex V1 targeted sophisticated options traders and failed with no users and no TVL. The key lesson was that focusing on the option itself was wrong: the option is not the product, the product is what you get out of it. Speculation is better served by perps or prediction markets, but the underappreciated use case is generating income from option strategies, which perps and prediction markets cannot do. So Rysk rebuilt from scratch as a primitive for income generation targeting anyone holding an asset rather than traders, using an RFQ system where option desks price a two-second auction for the best price, with on-chain settlement and fully collateralized positions (no liquidations, no rehypothecation, composable, collateral locked in the smart contract rather than sent to the counterparty). The redesigned UI lets a user simply choose what price they are willing to sell ETH at on a future date. He shares that TVL drops every Friday by design as positions settle and capital returns, yet the trend grows with a 90% retention rate, since users understand the single use case. Institutions are now using Rysk to run their own structured and ETF-like products, drawn by full transparency and no counterparty or credit risk while still trading with selected counterparties permissionlessly. He frames Rysk as evolving into infrastructure and a liquidity layer for volatility and structured products on any asset, just deployed on Ethereum mainnet (with gold collateral coming next week), chosen as the neutral, trusted, asset-rich home. He closes on the pillars of trust minimization, no intermediaries, no counterparty risk, and accessibility for anyone, not just sophisticated traders. 00:00 Introduction 00:37 Why Options Don't Work in DeFi 00:57 The Challenges of Building Options 01:16 Why Order Book Exchanges Struggle 01:43 Why Only a Few Order Books Stay Liquid 02:02 Why Options Vaults Died 02:26 The OTC Alternative and Its Problems 02:40 Rysk's V1 and Why It Failed 03:20 The Key Lesson: The Option Is Not the Product 03:36 Why Speculators Use Perps and Prediction Markets 03:53 The Overlooked Income Use Case 04:15 Targeting Asset Holders, Not Traders 04:35 Rebuilding as an Income Primitive 04:56 The RFQ System and On-Chain Collateral 05:14 Why Collateral Should Be Safe and Composable 05:32 Redesigning the UI for Simplicity 06:05 How the Covered Call Instrument Works 06:36 Why Collateral Is Locked in the Contract 06:57 Why TVL Drops Every Friday by Design 07:28 The 90% Retention Rate 07:51 Maximum Flexibility With Full Transparency 08:07 Why No Bridging Is Needed 08:28 Remembering the Crypto Ethos 08:56 Why Institutions Use Rysk for Transparency 09:16 Why Not to Take Shortcuts in DeFi 09:39 How Institutions Trade With Selected Counterparties 10:00 Building an Entire New Infrastructure 10:30 Institutions Running Structured Products 10:52 A Liquidity Layer for Volatility Products 11:30 Why It Is Built on Ethereum Mainnet 11:56 Why Ethereum Is the Natural Home 12:25 Enabling Volatility on Any Asset 12:44 Why Trust Minimization Matters 13:04 The Pillars of the Product 14:02 Why Accessibility Is the Whole Point 14:21 Closing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ *ETHConf 2026* ETHConf is a 3 day event for founders, industry leaders, and builders who are excited about the possibilities of building on top of Ethereum. Connect with 2,000+ top innovators in crypto, finance, technology, and policy at our inaugural three-day event packed with showcases, demos, partnerships, and conversations shaping the future of the global economy. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ✅ *Follow ETHConf* X: https://x.com/ethconf Website: https://ethconf.com _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 🎟️ Get your early bird tickets for ETHConf 2027: https://ethconf.com/2027#tickets 🎤 View the full ETHConf 2026 Speaker Schedule: https://ethconf.com/schedule _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _