DOPP - Leveraging ZK Technology for On-Chain Orderbooks and Complex Margin Systems in Options Market

uh I'm otman co-founder and CTO of uh dop uh it's the first fully on chain order book based option exchange and uh dop is here to tackle three main points that we have seen on the Defi and especially for derivatives market and options first one is centralization uh I don't know if you know but derat has like more than 90% of the market share uh and we all know the problems involved with the centralization uh we have seen uh FTX and a lot of uh troubles related to this uh secondly Capital inefficiency so we already seen uh a first wave of D5 options D5 projects which were do uh which are mainly vaults that are selling options but they are over collateralized and it doesn't really make big sense to have options which are overized you can just trade spot or perps in this case uh and lastly like of composability so one of the biggest strengths of defi in addition to be decentralized permissionless accessible secure uh composability is a big thing uh in traditional Finance even in the same bank uh you you cannot find this composability that we have and it's a big chance that we have uh just to give a brief uh context I have been working in traditional Finance for several years as a data scientist and as a lead data scientist and U I know that the composability part it's not well marketed in defi but it's a big big strength uh so dop our unique solution um which make us very different from what have been made before in the defi space especially for options is that we are fully on chain means order book onchain execution margin system settlement everything on chain uh inheriting uh ethereum security we are as much Capital efficient as major centralized exchanges like derat Delta binance Etc uh we have the same aggregated standard margin system we also working on a very optimized portfolio margin which is uh also not very common in also in centralized exchanges uh and yeah composability so options in traditional options are by Design standard contracts and uh in defi we don't have this standard for options we have ERC 20s for tokens but we don't have any uh standard for this so do was designed uh with the the goal of being as much compos as possible so we're building this first and standard uh for options this liquidity layer so that people can come build Etc with it so it can be integrated everywhere it's just some ERC 20s with metadata like strike price maturity date and the option type so yeah uh so there is a slide missing but it's okay uh let me see if we can have it no okay no problem uh so as I said the the goal of dop is to to give access to options to everyone to trade them in a capital efficient way and also the goal uh I don't have the graph because there is a slide which I can't show but there is some vanilla strategies that can be built with options uh with just combining different options Etc and this will will give it in a one single trade for retail to have this kind of strategies like long volatility which is just buy call and put option with the strike price and this will be in the with the same uh in one single click uh leveraging our native account obstruction so what we are building is more than just a DEX we building whole derivatives and the ecosystem so what we want to build is this first liquidity layer we build the exchange the order book we bring the liquidity we're working with top chair market makers for this uh we have we will have the the best user experience possible we already have leverage in the native account obstruction for example Market maker have the same API as the rivit so the integration is as smooth as the RIT yeah uh dop is built on a ZK Sovereign rollup we're using Madara as a sequencer you can see mad as the op stack but for star net so s answer is mad we're using starware Pro sharp to prove uh and settle on either L1 or stet and we are also using data a BT layer for all the data that are not very interesting and um which is changing a lot have a big frequency of change so we are in the stable Summit and we're here to talk about stable coins so why do we really need the options and derivatives for stable coins first we can imagine new set of stable coins over collateralized Delta nral one where we put it and put option so you are delta nral and the yield come from the payoff of the put option second uh for a scalable and uh sustainable Defi and uh stable coins Market we need to bring big institutions uh family offices uh Edge FS Etc uh these actors need to have the same product as in traditional Finance so right now if you in defi yeah you can have a St coin but you don't have a uh you can just land it you can't do much with it you can do a loop but yeah you don't have any structured product or anything so these players need to have the same product as in traditional Finance uh in instance one of these product is a is a structured product how does it works so structured product is just a zero coupon Bond a zero coupon bond is a is a a bond that you buy with a discount and at the maturity date you get uh the the the zero coupon with the nominal value and with the discount you get up front you buy with each option either call or put options so in our case we are working with the projects like Spectra Pendle angle Etc so for example you take the stable con Fromm angle or AA or whatever stable coin you separate the yield and you get a fixed yield with Pendle or Spectra and with this yield being paid up front you can have the zero copon Bond like in defi you can buy the options or a strategy with the the yield that have been paid up front and at the maturity date you have your Capital your initial Capital which is save and you have uh your your option so it can be in the money and you make the money or otherwise you don't lose anything so you are exposed to the market but your initial capital is safe and this kind of products are very popular in in the traditional Finance world so uh how is it possible with ZK because uh as you all know it was U not possible it's impossible to have a an order book on chain it's uh it's a complete no sense to have an order book on L1 uh you you have to execute an order book uh all the validators need to execute it for each order you imagine all the validator creating the order or canceling the order it's complete mess so how is what is good with ZK is that you can execute only once and verify it everywhere uh you execute your order book in your ZK up chain or and call it a ZK server and then the validators will just verify the proof which is much cheaper than executing or proving in instance so you can see validity proof or what we call ZK as a compression of compute when you do a zip you just compress the file size in our case you comp you compress the the computer so you do a complex computer into your ZK up chain and is verified on L1 in a cheapest way possible so at the end you can have as much computation as you want theoretically and you can verify it on L1 in a cheapest way uh putting everything on CH doesn't solve the all the technical challenges so we have all the smart contract on say so we have have the margin system liquidation system we have the order book on chain but with this being fully on chain you also have some additional challenges in web 3 in general what we have seen in the past is that uh classic DBS just use an indexer and on top of it you put a back hand like graphql or something but in our case the the most important thing is latency so to have this uh the lowest latency possible and the best finality you need to index data in real time you need to ingest it you need to process it uh you need to store it so you can uh serve it into to your back end your API and in your front end so with our strong experience in traditional finance and web 2 we have designed a whole microservice is uh multi microservices architecture to do this uh and it's quite very complex uh in your to do it under the hood you have the contract but under the hood there is a lot of work so that your API can serve Market maker with websockets with good performance with zero compute on your back end and on your front end so thank you if you have some question don't hesitate you can uh come if you want some Early Access just to give you an idea about the current state we have a private test net going for a few months ago with some market makers and we are planning for a minut at end of this summer uh also we planning a public test net very soon so follow us on Twitter dope HQ and yeah don't hesitate if you have some questions thank you