Polynomial

“Acrylic is ecstatic to be backing the Polynomial team in building the hub for decentralized options. The team is young, wickedly intelligent, and relentless in building a accessible and one-stop shop for decentralized options” — Ash Egan, Acrylic

“The options market is tremendous and I believe that Polynomial can provide the entry point and liquidity for this market through their options aggregator product” — Paul Veradittakit, Pantera Capital

Follow our handy guides to get started on the basics as quickly as possible:

• Testnet setup: For users who want to learn about testnet setup. Skip if you are already familiar.
• Trade: For users who want to buy a Polynomial option at market price.
• Mint: For people who want to mint a Polynomial option for providing liquidity or to write an option.
• Pool: If you want to earn swap fees from people buying Polynomial options.
• Portfolio: To view your positions of Polynomial options and pools.
• Redeem: To convert your minted position back to the asset.

Polynomial team is building in decentralized finance – a more fair, accessible, efficient, and transparent financial system enabled by crypto.

It started in HackMoney 2021 by ETHGlobal with the radical idea that anyone, anywhere, should be able to easily and securely buy on-chain options at a fair premium.

^{(Only available on Kovan atm)}

Polynomial Protocol uses Uniswap v3 to create deep liquidity for option contracts. Call Options are created using UMA protocol's Long Short Pair library. Uniswap v3 liquidity for options are managed by Polynomial Protocol and rebalanced frequently using Black Scholes pricing mechanism:

• The smart contracts are written using Solidity and Frontend is built using Svelte.
• The smart contracts interact with Uniswap v3, UMA and Chainlink.

• Call options are created using UMA's Long Short Pair synthetics with the help of Covered Call FPL
• Call option minters can choose to create a Uniswap v3 pool of 1% fee. Users don't need to worry about pricing the option as it is taken care by the protocol using Black Scholes pricing mechanism
• Uniswap v3 liquidity managed by the protocol, and frequently rebalanced as the time goes on. In each rebalancing, with the help of Black Scholes pricing mechanism new pricing range is calculated (corresponding pool ticks). And the liquidity is migrated to the new pricing range.
• Spot price required to calculate the Black Scholes is fetched by Chainlink Oracle

• This mechanism creates deep liquidity for UMA options with the help of Uniswap v3

Polynomial brings multiple on-chain option protocols in a single venue, encouraging arbitrage and competitive pricing.

Polynomial offers optimized liquidity for options through Protocol Controlled Liquidity (PCL). Lower option premiums, higher upside.

Polynomial provides users the ability to earn yield in a sustainable way or hedge against divergent loss using various options strategies.