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Meta-Vaults: Aggregated Pool Strategies
The Premia pools enable dynamic, strategic LP strategies at a protocol level.
Meta vaults are designed to embed various LP strategies into new pools of liquidity that implement the strategies automatically. This is made possible by the Premia base pool architecture. As an LP, on several other platforms you are forced to take a universal "short volatility" position (i.e. underwrite calls and puts simultaneously), which can often be a losing bet in crypto. This is not the case on Premia, which enables asset and direction-specific option pools.
Using the Premia option pools you can embed strategies such as:
- Optimizing for Premia token farming
- Deploying capital on momentum (when a C-level within a pool changes)
- Delta-hedging and other hedging strategies involving greeks or spreads
- Shorting volatility for specific assets
- Options arbitrage between different platforms
- Many more
The reality, however, is that most of these meta-vault strategies will only be possible on Layer-2's with highly decreased gas costs compared to Ethereum mainnet. The current cost of gas on Ethereum mainnet makes most of these strategies unviable in a capital-efficient manner (the strategies lose money due to gas costs or cannot efficiently run the strategy due to capital requirements).
This being said, Premia is working on bringing the protocol to multiple chains in the near future, which will enable meta-vaults as described above to be created on some of those chains. We look forward to the day when all kinds of advanced options trading and underwriting pools have been built on top of the base Premia pool architecture, enabling hedging strategies and trading strategies that were never before possible.
If you or your team is interested in building on top of the Premia architecture, please reach out on Discord! We would love to hear from you and help you build on top of the existing ecosystem.
Last modified 4mo ago