# Perpetual Options With Panoptic | Guillaume Lambert - Panoptic - Channel: [Ethereum Denver](https://streameth.org/ethereum-denver) - Date: 2026-03-09 - Duration: 13:52 - Topics: ETHDenver, Crypto, Web3, Blockchain, Event, Conference, ETHDenver 2025, ETHDenver 2024, Bitcoin, Ethereum - Watch: https://streameth.org/watch/yt-xJ6AL-oTE4A - YouTube: https://www.youtube.com/watch?v=xJ6AL-oTE4A ## Description πŸš€ Get Ready for ETHDenver 2026! πŸš€ We're already hard at work preparing for next year's biggest Web3 event! Keep your eyes peeled for more info on ETHDenver 2026β€”it’s going to be epic! 🌟 ## Transcript Guom, are you ready? >> I'm ready. >> Okay. Okay. So, Guom is going to be talking about perpetual options with pan optic. um and he's going to present data illustrates the problem um and outline some of the potential path of solving the problem so for the for the industry. Are you ready? >> Yes, I'm ready. All right. Thank you. Hello. I'm Guiam Lumber. I'm the founder of Panoptic. We do options on Ethereum mainet. Uh this is the mini trading summit. So I'll reward you for your patient with a piece of alpha at the end of of the talk. So this is options. Uh the alpha is different but I'll try to walk you through it. Um first of all uh the first thing that people have to realize is when you use unis swap you are an options trader. When you swap it's actually how you exchange tokens. But if you're an LP in unis swap you are an options trader. And we are repurposing the LP out of unis swap. That's a tagline to create an options clearing house. I'll go over the thesis again that we go beyond just saying it's like an option unis swap is an options protocol and we are using this in panoptic to make options happen on mainet there's a few I'll go through all the ways we think they are similar uh how we can create options how we can buy options how we can get paid by selling or buying options and I'll go through that by looking at the unis swap to panoptic um correspondence uni v2 first of of all x * y = l 2. Most people uh know about this invariant formula that allows anyone to trade tokens token A for token B in uni unis swap v2 no need for market makers you have an invariant that exists and it's satisfied for every trade with unis swap v3 this came out in 2021 um the unis swap team came up with concentrated liquidity which is basically taking that uni v2 invariant and shifting it down and at some point it's going to hit the two axes An upper price and a lower price will determine uh whether you're trading between the two tokens or if you're above the price it going to be 100% of token X. If you're below that price will be 100% of token Y. But the key environment X time Y equ= L squ is the same for uni swap V2 to V3. It's just that that curve is shifted down. There's some math involved to kind of understand how this shape uh now is created. But the way I like to look at this that you can invert that uh invariant to create what looks like a payoff curve. If you remember we had two price points. If you're above the price you're 100% USDC for instance. If you're below that price you're 100% ETH. So in the ETH USDC pool your LP position kind of looks like this. It has a shape. It has a uh I mean semi complicated formula but you have a shape that you have to trade. This is what you enter into. you buy into that payoff when you go into unis swap as a LP. Um, and this is kind of two ways to look at unis swap LP positions. You can look at the invariant side or you can look at the payoff side. So both are kind of equivalent. I prefer this one much more because when you look at this and you squint a little bit, you kind of realize that uh liquidity is only active in the range and below the price it's one all the one token above is the other token. But that type of payoff is quite common in the options trading world. This is what a covered call payoff looks like. In a covered call, you may have to use ribbon or any other uh uh options vault. But when the price goes up, you sell into USDC. When the price goes down, you buy more ETH. And somewhere in the middle, there is some curvature. But that is what we take as panoptic looks like an option, quacks like an option. Let's make it an option. So when you think about adding liquidity in unis swap v3 or v4 or any considered liquidity amm you're selling a put option. Selling options is difficult. If you try to do it yourself uh you had to read almost textbooks worth of uh of of of knowledge to understand how to manage put positions. This is the same problem with unisop lping. You are dealing with something that's quite complex. But if you start from this you can sell an option by just depositing liquidity. You can also short an LP token. So, this is a bit weird, but you take someone else's option and you remove it. You borrow it and now you flip the payoff. What was a uh put option that you were selling? You can actually buy a put option and can recreate the put option payoff that exists when you buy u options on any asset. Could be Tesla, could be GameStop, could be anything else. But now by trading at the LP token level, you're able to create long and short options. Put options, you make money if the price goes down. I like it. You can also uh there's a thing called put call parody, but you can convert puts to calls, long options to short options by having a uh a asset component, but I won't bore you with details. But can buy call options, you can also sell call options. You can do everything you can do with your Robin Hood trading firm uh trading uh app. using unis swap lb positions and this is what kind of uh panoptic enables. This is what we can do. You can go and trade. You can buy options, sell options. This is a spread. You can define your risk. You can do a lot of different strategies by again manipulating the LP positions to create the payoff that you want. Uh we have a lot of strategies pre uh loaded put spread. You can create per like instruments. You can take what is an option a very core primitive and compose it to create any payoff you want. And uh this is kind of a summary. LP positions themselves give you exposure to an option. And normally when you go and buy an option on GameStop, you pay up front. Here in uh the perpetual options world, you don't pay up front, but rather you pay as you go. So the last point is how fees are collected. Oh, okay. Smaller. Our fees are collected will define how much you pay for your option. You have a range and this range accumulates fees the longer you're in range. So, as an option seller, you sell something, you get zero. But as you wait, every block, every minute, you gain a little bit more. And as long as the price is in range, you collect fees. If it's out of range, you collect zero. So, you sell something, you get nothing back. But if it comes back, you gain. So the option is not paid up front or you don't receive the permit up front but rather you receive it as a streaming premium. It's like the fees that are collected over time. So on the sell side people may be used to collecting fees on the use of V2 V3 conceptually the same thing. Now when you buy an option you buy a call option you pay when it's in range. You pay as you go. You start with zero initial expense and if the price is in range you pay every block. If it's out of range you pay nothing. Hey every option. And if it come backs it go down and because we are kind if it's a marketdriven uh equilibrium the buyer pays a bit more than the fees. So the fees were that pick line the buyer will pay a bit more. They will reimburse the uh seller. So they pay something that looks like an implied volatility uh premium whereas the uh seller was receiving receiving realized volility premium. But if you start from this assumption, LP tokens as options, fees as the premium, you can replicate on Ethereum mainet an options protocol quite easily. We connect into unis swap, we leverage their liquidity and if there's one option seller on panoptic doesn't matter because the liquidity is all of the unis swap liquidity that exists uh that we built on top and you can we our interface is quite nifty. We have the different payoff. This is a straddle put in a call at the same time. You can control your risk. You can imagine buying options to reduce impermanent loss. So all of the trouble that us LPS are facing you can reframe them in terms of options and find a new set of tool uh to solve them. We show the premium over time and here this is in uh October 1010. The the LP position made as much in one day than it did in four weeks beforehand. So we trade on volatility. So as you option sell sheller you can actually see this in real time. So I promised and we are launching panopic v2. uh this is the the ad uh better security, better yields and better UX. So what we showed you is the V1. V2 will have vaults and structured products that will be managing strategies for you and we also have a slightly better yield um model but at the end of the day we're launching next month keeping open for this. Uh the vaults is going to be our flagship product and vaults for management similar to morpho uh we don't allocate capital to different lending protocols but we allocate capital to option strategies could be a gamma scalping vault could be lending vault could be a covered call vault the vault themselves are quite general and curators will be managing the strategies uh we will for instance a covered call vault will display exactly what the outcomes are uh and then the APY will based on the returns you receive but this is going to be kind of the at the core of user experience in terms of what can you do with options where someone else will help you manage your your risk as opposed to yourself having to do it. Um the piece of offer comes from one of the vaults that we'll be releasing. We call this the unicorn trade is the a gamma scalping vault. And if there's anyone here that knows about options, gamma sculping is a uh options 101 type of trade. You start with trading options. The first thing you should normally do is gamma sculp, which is hedging your position continuously trying to sculp or at least gain um gain value. If you do this today on any stock, Amazon, Tesla or S&P 500, you'll barely make any money. Maybe you lose a little bit. It's so efficient and so many actors are doing the same trade that there's no juice left. In panoptic, in the unis swap world, no one can do gamma sculping. It's actually quite inefficiently uh it's inefficient now and any uh test we do I'll show you the results shows that this trade that has been around since the 70s that never works now in trai because it's extracted the max value is quite profitable now because it's the first time you can do it remember you have to short an LP position on unis swap you cannot do this today you have to go to panoptic and when we enable this to happen then gamma scalping which is a uh simple strategy that I described is uh a key component of how you can actually tap into and extract value from the underpric options that exist. TLDDR tried to do it quick uh how gum scalping works. You buy what looks like a straddle or you buy a call option and you hedge but you have something that seems to profit whether the price goes up or down and you pay every block. But if the price moves, you can actually gain some value. And the way this works is you have your payoff. Uh the price moves up a little bit, you gain some profit, and if the price goes down, you lose them. If the price keeps going, you make more. But in a per like or any linear instrument, going down means you lost the gains you've made. So what you do is you gain your you get a gain. You hedge right away to secure that win. You rehedge. You're now delta neutral again. And when the price moves again, if it goes down, you make money. If it goes up, you make money. You It's like a ratchet that always wins because you also always secure your your wins. You can think of a situation where you start here, price goes down, back up to the same exact point, but like a ratchet, you always win win win for each little price move. And you can gain uh what you gain normally should be offset by what you pay. But because in panoptic and unis swap, you pay very very little, then you have a good edge, I guess, for that. uh in for instance in 10 10 if there's a huge move you're not even in front of your computer but you let the delta runs in a way you don't hedge then it's pure profit because you gain on leverage 15% on on the move and and you the price never went down so you keep winning. So this is one of those strategies is a bit more retail friendly because you can uh manage this not as efficiently and still gain because the the the price can still moving. Uh last slide we have the price of ET between 2024 and now from 20 2200 to 1,800 went up to 4K down very very stressful if you hold but you are net negative 15%. If you gamma scalp if you can do this by uh doing back testing you're up 20 220%. Because you win every time you buy low and sell high and you don't have to think about the execution. The gamma scalp tells you the signals. So this is going to be the vault. Uh oh yeah for the nerds here this is how you quantify this. This is going to be the vault that will be running here at panoptic. Uh you can do this on the five bips 30 bits versus five bits. There's a few distinctions but the the key point is that the lower the fees the better the feier the better the strategy. Take home message LP clearing house. Pinoptic uh unwraps the uh optionality in defi. We're live on mainet. Watch us for V2 that launches in a few days. I write stuff on Twitter too if you want to see my takes and all the links. Thanks very much.