Introduction To Options Vaults

What are Options Vaults?

DeFi Options Vaults, also known as DOVs, are a venue that crypto users can use to generate yield on their coins. Users deposit their coins into the DOV via smart contract. The vaults then sell options on the coins and receive a premium for doing so. These premiums are reinvested into the strategy over time to sell even more options, providing depositors with compounding yield. The entire process is run in an automated and transparent way on-chain, hence the term "DeFi Options Vault".

Bonsai Strike's options vaults run an automated European options selling strategy. Selling options earns the depositor premiums on options sold on a weekly basis. Yield is earned as a result of premiums paid by options buyers instead of minted reward tokens - this ensures that the yield is sustainable in the long run.

Users simply deposit collateral into vaults of their choice. The vaults automatically deploy all deposited collateral into the options strategy every Friday, and collateral is locked until the options expire the following Friday. Users will be able to observe whenever a particular option is minted and sold to receive premiums.

The vaults available at launch are:

• Covered-call Strategy (For users holding BNB)