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Hello Anon, good day, today we are going to talk about the Dopex Single Staking Option Vaults (aka — SSOV).

Let’s start with the most important — this article will explain how it all works and what strategies you may try to employ while understanding your risk.



Let us start with a quick overview of what we’re going to talk about. Also, for your comfort, we’ll open with an abstract to give you a quick rundown. If you come across some wording that may be hard to understand — scroll down, there’s a glossary for you, Anon.


  1. What is SSOV?
  2. What can I do as a staker? What is my risk? What is my potential profit?
  3. What can I do as an option buyer? What are my risk and potential profit?
  4. Some calculations for your entertainment.


First of all, this is not financial advice nor a recommendation and you should always determine your risk tolerance, investment horizon, and all other factors.



  • Lock your tokens in a vault for an epoch
  • Choose from 3 call option strikes.
  • The vault will farm rewards and automatically offer call options to buyers to boost your APR.
  • The buyers may claim some of your tokens at the end of the epoch.
  • Result: higher APR with higher risk.


  • For USD maxis — you can accrue a higher USD value compared to holding a token in your wallet, but with a maximum cap.
  • For token maxis — token harvests will be boosted as long as the options you agreed to sell are not exercised. Otherwise — you need to share a portion of your tokens with the option buyers.

Option Buyers:

  • Make an asymmetric bet on the price of the token in the future, with potential triple-digit returns
  • Pay a premium upfront to purchase a European-type call option
  • If the option is in the money at the expiry — receive profits
  • Otherwise — your initial investment is lost

Now let’s get to the business.



What did he mean by this?

SSOV is an abbreviation for “Single Staking Option Vault”.

On the surface, it will look like a Pool 3 you know from many protocols, where you single stake your token (no LP, no impermanent loss) and receive some rewards, usually at low APR (more tokens, protocol revenues, etc).

Pool 3 is known to be almost risk-free as you exit with more tokens than you put initially.

But Anon, what if we’d introduce some risk to Pool 3 to boost the rewards? More rewards, but with risk. It will be a different risk than the impermanent loss you know from LPing. When you think about it, it will be a much easier risk to grasp — a risk of spot price movements. So — if the token price moves into a certain area, you may be at loss.

In a nutshell, SSOV works the following way:

  • Lock your tokens in a vault for an epoch
  • Choose from 3 call option strikes.
  • The vault will farm rewards and automatically offer call options to buyers to boost your APR.
  • The buyers may claim some of your tokens at the end of the epoch.
  • Result: higher APR with higher risk.

Alright, how do you participate?

There will be two sides to SSOV:

  • The Stakers
  • The Option Buyers

What Will The Stakers Do?

  1. Prior to the beginning of a new epoch, strikes are set for the month-end.
  2. Users lock assets into this vault for the duration of the epoch (i.e users will only be able to withdraw/unstake at the end of each epoch) and select from a set of pre-determined fixed strikes that they would like to sell calls at.
  3. When users deposit into SSOV, the contract automatically does 2 things:
  • the vault will automatically write (sell) covered call options on the deposited tokens.
  • it deposits the users’ tokens into a single staking pool for farming rewards

4. Stakers will collect premia for selling those options, which may boost the APR quite significantly. The premia will be also compounded, for extra rewards. In addition, the Stakers will receive all other Pool 3 rewards.

In essence, users will be selling covered calls at low risk with no need for intensive knowledge on option Greeks.


Built for frogs, by frogs

What Will The Option Buyers Do?

  • Option Buyers will be able to buy the call options during the epoch and pay premia. The premia will be paid to the SSOV stakers.
  • The options will be European — which means they can be exercised only at the expiry. There are two outcomes here:

If at the expiry, the options are in the money: the option buyers will profit(at the cost of the stakers).If the options are out of the money — the option buyers lose what they paid (premia) and this money stays with the Stakers.

This means — being the option buyer is more of an all-or-nothing play. It’s quite degen, as if the spot moves against you, you lose your whole initial investment; but, if the market moves in your favor, you end up with returns much greater than spot.

However, if you like to boost your yield, cap the upside, make the downside less painful — all on autopilot — being a staker sounds like a role for you.


📌 What can I do as a Staker? What is my risk? What is my potential profit?

The answer to this question is simple but depends on how you measure your gains and losses — whether it’s in USD or in the staked token.

Let’s break it down. Stakers’ PnL will come from three sources:

  • Pool 3 staking rewards
  • Premia collected
  • Spot market movement

How would these impact the return?

  • Pool 3 staking rewards are usually fixed, per block, so their APR depends on the TVL and the price of the reward token.
  • Premia collected will depend on the activity in the vault (whether it would attract option buyers).
  • Spot movement will impact the USD valuation and also determine if any options will be exercised.

So, what does this mean?

If you determine your PnL in the token, it’s simple — as long as the price at expiry is below the strike price, you end up with more tokens than you put in the vault.

However, if the spot at the time of the expiry is above the strike, some of your tokens will be paid to the option buyers. At first, these will chip off your yield collected, but your principal staked may also decrease if the spot ends up much above the strike.

So, if you expect the spot price to remain below the strike at the expiry, you want to maximize your token harvesting and you are fine with some risk — you may consider using this strategy.

How About The Stakers That Determine PnL in USD?

  • If the spot price falls significantly, your USD market value will also fall, but by less — the drop will be partially offset by the premia collected and the yield farmed.
  • If the spot price falls by less than the value of premia and harvests collected — the stakers will be still up in dollar terms. This is quite interesting when you think about it — the vault will insulate you against small market drawdowns.
  • If the spot price goes up but remains below the strike, the stakers will earn more than holding a token on the spot market (once again thanks to the premia and yields) — this is once again the scenario where the stakers would like to find themselves at.
  • If the spot price is above the strike, your USD market value will be capped. This means the stakers will be up in USD value, but if the spot overshoots the strike by a wide margin, they may be comparatively worse than if they held spot instead.

All in all — increased yield in the middle, insulated downside but at the cost of capping one’s upside.

One important comment — the above assumes that the vault will be fully utilized — i.e. for each token there will be a corresponding option sold. The lower the utilization ratio — the closer to a traditional Pool 3 behavior it’d be.


📌 What can I do as an Option Buyer? What are my risk and potential profit here?

Anon, it’s simple — you can buy European calls. Your risk profile is as for any other calls, which is covered in the Dopex Essentials series:

Dopex Essentials: What Are Options?

Options trading in the DeFi space is a facet of the market that is relatively underpopulated. This can be largely…


Good pepes read the essentials first


In this section, we’ll present some very high-level calculations and simulations to help you understand your payoff and risk better.

But Anon — remember, we’ll have a whole set of assumptions here (so make the picture a bit more simple), but we’ll go through these and explain what they mean.

Let us begin:

T0: time when the SSOV epoch starts

Tc: time when the SSOV epoch ends and options expire

P: token’s spot price

S1, S2, S3: strike 1, 2, 3, etc

c1, c2, c3: premium for an option at strike 1, 2, 3

Y%: yield generated in pool 3

Example A:

For this example we’ll use:

P at T0 = $2,000

S1 = $2,400

S2 = $2,800

S3 = $3,200

That means that when the epoch starts, the spot price will be at $2,000, while calls can be written and purchased at 2400/2800/3200. This is an assumption only and these numbers will vary for each epoch.

To simplify, we’ll assume the premia will be constant and will look as follows:

c1 = ca. 19% of the notional, so about 380 USD per token

c2 = ca. 16% of the notional, ca. 320 USD per token

c3 = ca. 13.5% of the notional, ca. 270 USD per token

This assumption is to make the calculations easier. In real life, the call premia will change during the epoch (will go up with volatility and if spot goes up, but will go down as we’re closer to expiry, or should the spot go down)

Let’s use Y at 12.00% per year, which will give 1% per month. This is quite in line with standard Pool 3, “xTokens”, and other riskless single-staking mechanisms, where the yield is usually in the 10–25% range for established protocols.


Are you following, Anon?

Now let’s plug these numbers in and see how the PnL would look like for an option buyer who bought at the start of an epoch.

Once again, this is just an example and the payoff may look completely different depending on when the options are bought and what are the premia.

For example — buying cheap calls close to the expiry and then watching the spot price pump would be the dream scenario. For now, we will use something more conservative.

All in all — big gains and big losses only.


Sample PnL of an Option Buyer



Sooo, the vault will do it all for me?

Let’s start with the Stakers that use USD to calculate their PnL.

What we see is in line with what we described earlier — yields + premia collected will boost the USD return but in exchange for capping one’s max USD profit. The amounts will also depend on the % utilization of the vault — i.e. what percentage of tokens in the vault was used for option writing.


Sample % USD change of Staker selling calls at $2,400


Sample % USD change of Staker selling calls at $2,800


Sample % USD change of Staker selling calls at $3,200



Another good point

For investors who are holding the token long-term, but want to maximize the yield farming in the short-term, things look quite interesting.

In general, the yield will start to decrease once the spot is above the strike, but it will still offer some buffer for any movements above the strike. As the option-selling will generate a significant amount of yield, stakers may end up better-off by ending up slightly in the money, compared to staking in a simple, traditional, single-staking pool.

Let’s have a look at the below sample examples:


Sample % Token change of Staker selling calls at $2,400


Sample % Token change of Staker selling calls at $2,800


Sample % Token change of Staker selling calls at $3,200

I guess that’s the end here.

All in all — if you are looking for a single-staking vault, that significantly boosts APR but has some interesting, asymmetric risk involved — you can consider SSOV as a solution for you.


No longer a cryptic tweet?


Let’s hope so…

Thanks for reading! Thank you to Halko for the time and effort taken to dive into some SSOV Strategies. You can expect more in the future.

Enjoy SSOV!

Appendix 1 — Glossary:

APR — Annual Percentage Rate, the return rate on the investment, annualized.

Epoch — An era of time within a blockchain network. Here — a determined period of time, during which the SSOV will complete one full cycle of locking in the deposits, trading options, and exercising them.

European Option — An option that can be exercised only at expiry.

Farming/Harvesting — A process of earning tokens through Defi protocols, usually by depositing other tokens, liquidity, stablecoins, etc

Impermanent Loss — A term related to liquidity providing, a relative loss in value of assets compared to having them not deployed.

In the Money Option — An option, that if exercised today, would result in a payoff to the buyer.

LP — Liquidity providing tokens. Tokens staked in various exchange protocols used to provide liquidity to traders.

Option Buyer — A party that buys an option (a right), which can be exercised in the future, at the determined date and price. Option buyer will pay a premium for this right.

Option Seller — A party that has an obligation to deliver assets at agreed terms to the option buyer. Option sellers receive premia from the option buyers.

Out of the Money — An option, that if exercised today, would not result in a payoff to the buyer — i.e. it would expire worthless.

PnL — Profit and loss.

Pool 3 — In the Defi slang, a contract that allows for solo assets to be locked in the protocol and to receive rewards.

Premium — An amount paid by the option buyer to the seller for a right to exercise the option in the future.

Spot Market — A market where the asset can be traded for immediate delivery.

Staker — A person depositing the tokens in the contract.

Staking — A process of depositing/locking the tokens in the contract.

Strike Price — A set price at which the option will be settled.

Vault — A smart contract where users can deposit their assets to take part in some specific, predetermined strategy.

Volatility — A measure of change of the price.

Yield — A return on investment.

About Dopex

Dopex is a decentralized options protocol that aims to maximize liquidity, minimize losses for option writers and maximize gains for option buyers — all in a passive manner. Dopex uses option pools to allow anyone to earn a yield passively. Offering value to both option sellers and buyers by ensuring fair and optimized option prices across all strike prices and expiries. This is thanks to our own innovative and state-of-the-art option pricing model that replicates volatility smiles.

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