[For Discussion] Options DAO

Author: fengtality 0x352

Original Post Date: 8 Apr 2022


Support for options exchanges and protocols has been a often-requested feature from the Hummingbot community. Prior to the inception of the Hummingbot Foundation, CoinAlpha (Hummingbot’s original creator) had to prioritize building support for more fleshed out sectors of the crypto exchange landscape, such as spot, perpetual swap, and AMM exchanges. Today, those 3 types of markets are the only exchange standards that Hummingbot supports. Since Hummingbot’s primary value proposition comes from providing a standardized trading interface to various exchanges (which often have idiosyncratic trading APIs and other behavioral nuances that come into play when running long-lived bot processes across them), the team behind Hummingbot felt that extending the project to options was too early.

However, now that Hummingbot is a community-maintained and operated project admininstered by the Hummingbot Foundation and governed by HBOT token holders, the Foundation believes that the time is right to begin research and prototyping options exchange/protocol connectors to Hummingbot.

Since Hummingbot’s goal has always been to build tooling that helps traders bridge the gap between centralized and decentralized exchanges, we believe that supporting options should ideally enable support for both centralized options exchanges, as well as decentralized options exchanges and protocols. The Foundation has already discussed supporting options with various stakeholders, such as market makers who trade on Deribit, as well as decentralized options protocols like Opyn, Siren Protocol, and SynQuote.

Options DAO

Hummingbot Foundation proposes to incept an “Options DAO”, a small collective comprised of Hummingbot community members who will research, prototype, and eventually build the first options exchange connectors to Hummingbot. Similar to Technical Review DAO and other sub-DAOs supported by the Foundation, we envision Options DAO to be a small group of engineers and quants with diverse skill sets who have enthusiasm for trading options. Members of Options DAO would be incentivized by HBOT token developer grants from the Hummingbot Foundation, along with complementary grants/bounties from the options exchanges and protocols that they support.

Based on prior experience launching support for new exchange types at Hummingbot, we believe that spending a substantial amount of time researching and prototyping prior to building would be prudent. We propose to allocate a budget of 1-2m HBOT tokens to fund a 3-5 person member DAO to perform research/prototyping work until the end of Epoch 1 on June 30. If all goes well, we envision additional dev grants to begin building support for options exchanges starting in Epoch 2.

Specifically, we believe Options DAO should conduct research/prototyping to answer the following questions during Epoch 1:

  • What should the trading API interface look like for options in Hummingbot?
  • What exchanges should be supported initially?
  • What changes are needed to status, history` and other user interfaces for accommodate options trading?

Request for Comments and Interest

This is a preliminary proposal, and we welcome feedback from all. Also, if you are interested in being a member of Options DAO, please comment in the thread and add your qualifications/experience.

Author: keithbaum 0x80f

Hey Mike, that’s interesting. Agree with the approach of having progressive epochs.

I have a decent background in options and worked before in a crypto options exchange. Besides this I am pretty familiar with hummingbot connectors architecture so I would like to propose myself for collaboration in this project.



Author: BGT Capital 0x6DD

Hi. I would be glad to support this DAO. Even though I’m not an expert developer, I have extensive experience trading crypto options.

The crypto option space is growing, with multiple players trying to build a solution in this space. If the community finally agrees to extend HB into this space, there are multiple arbitrage and trading strategies that could be implemented. Focus should be Deribit, as it represent >98% of the market

Author: AG Hunter 0x3d5

Hi Mike, I would be interested in being involved in this DAO. My experience trading options is limited to trading on my personal account, but I do have significant experience with Hummingbot, I am a Hummingbot Fellow and Eagle Club Member and I trade other forms of derivatives with HB. I have an MBA with all the usual finance subjects thrown in, and I am currently collaborating with another member of the HB community with the aim of building exchange connectors for the foundation. I believe I could value add in a number of ways.

Author: Devore 0x362

I would like to be considered as a member in this DAO. I’ve traded options for approximately 15 years with a stint at a private hedge fund with $3M AUM. Our main strategy was premium selling against overvalued/over-hyped companies. I’d be happy to add value in any type of strategy development and/or back testing. I’m highly interested in partnering with other members in cross-market arb strategies, as more crytp option exchanges/platforms will undoubtedly come online in the near future.

Author: matej 0x2d4

Hey Mike, I’d like to be a member of the Options DAO.

Qualifications/experience: Quantitative Engineer at CoinAlpha, have been trading options for a few years, etc.

Hey , I’d like to be a member of the Options DAO.

Qualifications / experience : have experience writing algo trading with Python using Deribit and have written arbitrage in DEX also.