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

- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2026-07-09
- Duration: 14:44
- Topics: Rysk, Dan Ugolini, ETHConf, onchain volatility, options, DeFi, derivatives, volatility markets, covered calls, income generation, RFQ, structured products, collateral, counterparty risk, on-chain settlement, fully collateralized, no liquidation, composability, rehypothecation, order books, options vaults, OTC, perpetuals, prediction markets, yield, TVL, retention, institutions, ETF, liquidity layer, Ethereum, mainnet, gold, trust minimized, transparency, accessibility, primitive, option desks
- Watch: https://streameth.org/watch/yt-iee3Gmb6S30
- YouTube: https://www.youtube.com/watch?v=iee3Gmb6S30

## Description

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

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