Ribbon

Derivatives

Ribbon is a crypto derivatives platform that helps users access complex DeFi investment strategies. It offers several options products to achieve varying risk-return objectives.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Ribbon enables retail users to easily access options strategies to earn yield with its seamless user experience.
What we like less
Option strategies have a 10% withdrawal limit per week that will prevent depositors from withdrawing until the following week.
What it means for you
Ribbon leverages its Theta Vaults to allow you to easily earn yield on your deposits through weekly automated options selling strategies.
Information
Info
  • Website
  • Token: RBN
  • Tags: Derivatives
Key Metrics
  • TVL: $15.1M (Rank #132)
  • TVL Ranking by Derivatives: #0
  • Blockchain: Ethereum, Avalanche, Solana, Binance
  • Chain TVL
    • Ethereum: $13.99M
    • Avalanche: $596.09K
    • Solana: $524.44K
    • Binance: $8.02
Risk Assessment
Average
Protocol Code Quality
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 10% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • Robust controls to mitigate oracle price manipulation
  • This protocol is susceptible to risks related to decentralized options, such as loss of principal if they were to expire in-the-money (ITM)
  • Ribbon pools funds to write or buy option contracts in auctions; profits are shared across all pool depositors minus fees
Things to know about Ribbon

How Ribbon works

Ribbon's core product are its Theta Vaults which run an automated options selling strategy. These vaults earn yield on a weekly basis through writing out-of-the-money (OTM) options and colleting the premiums. Users simply deposit their assets into a vault and it will automatically start running a specific options strategy. This reduces the majority of high gas fees as the vault socializes the gas costs across all vault depositors. Theta Vaults relies on Opyn oTokens, which are ERC-20 tokens that represent an options contract. Each oToken has a strike price and expiry date. oToken holders have the right to redeem some amount of the underlying asset if the strike price is hit. In order to run an options selling strategy, the vaults need to be able to mint and short oTokens. As such, the vault uses the deposited funds to lock collateral into Opyn and mint oTokens. It then sells them for a premium which is used to pay vault depositors their yield. The vault's collateral will be locked until the expiry of the oToken.

How Ribbon makes money

Ribbon takes 10% performance fees and 2% management fees. Half of the protocol revenue is sent to the treasury while the other half gets converted to ETH and distributed to RBN stakers (veRBN).

How you make money on Ribbon

You can generate yield by depositing assets into Ribbon's Theta Vaults to collect option premiums and staking rewards. veRBN holders can also earn 50% of all protocol fees by staking RBN on the platform.