Introduction

After the Summer of DeFi in 2020, protocols like Uniswap, Curve, and Aave became widely known, and fundamental DeFi functionalities gradually gained traction on blockchain networks.

With the continued amplification of the meme craze, long-tail assets have proliferated. However, tools for trading high-volatility assets are still scarce. Users still primarily use contract trading to trade long-tail assets, which causes a mismatch between the users’ exposure and their trading logic.

Typus offers a tool for trading volatility. Compared to traditional options markets, Typus introduces mechanisms like yield vaults, Dutch auctions, and 10-minute options, allowing both options buyers and sellers to meet their respective needs.

TVL Ranking of Sui Ecosystem Protocols on DeFiLlama

Typus ranks 13th in TVL (Total Value Locked) within the Sui ecosystem, with a 45% growth over the past month. Its growth rate has surpassed that of most other protocols, even on weekly and daily levels.

Options Vault TVL Ranking on DeFiLlama

In the options vault category on DeFiLlama, Typus ranks second, with only a small difference from the top-ranked protocol.

Main Products

Options

Typus’s standard options are European-style options, settled in cash, and can only be exercised on the expiration date. Call options are settled in tokens or stablecoins, while put options are settled in stablecoins. The settlement time is at 8:00 UTC on the delivery day. The settlement price is provided by the Pyth oracle and the Cetus DEX.

Currently, Typus’s options are fully collateralized to avoid risks of insufficient liquidation or price manipulation for high-volatility long-tail assets.

Yield Vault (Options Sellers)

Although options trading has already been introduced on various centralized exchanges, it must be acknowledged that as a derivative product, options still remain a niche product on blockchains. Few people, like in traditional markets, trade options for profits through Greek letters or price them using the Black-Scholes model. Most users employ options such as speculating on volatility (long or short) or simple hedging.

Typus Yield (Options Vault)

Unlike traditional options exchanges that use order book-based trading, Typus offers a simpler, more intent-driven approach where deposits into the vault serve as a way for options sellers to engage in trades. This method is straightforward and simplifies the options trading process for beginners.

Typus Options Vault Operational Process

In addition to token types, Typus’s vaults also differ in duration. The available durations include 10 minutes, 1 hour, 1 day, 1 week, and 1 month. Users do not need to repeat deposit actions. After the initial deposit, once an option of a given duration expires, the vault will automatically roll over into the next duration until the user decides to fully exit the investment for that token and duration.

The vault types correspond to four different options strategies: the vault serves as a seller of call options, put options, capped call options, and capped put options. However, for beginner users, it’s not necessary to break these down into specific categories. The key is understanding the position’s direction and knowing when the price hits a point that will trigger a profit or a loss.

In terms of asset types, Typus not only offers popular tokens such as BTC, ETH, SOL, and SUI but also includes tokens from Sui ecosystem protocols like SCA, NAVX, and meme coins such as BLOB. This essentially covers all the needs of Sui ecosystem users. Additionally, for certain specific asset vaults, there are extra multipliers that provide higher returns.

Bidders (Options Buyers)

Typus Bid (Bidders) Page

From the buyer’s perspective, the options available for purchase correspond to those from the seller’s side, including call options, put options, capped call options, and capped put options. In addition, certain assets offer two graded Delta options (25 and 45) where lower values trigger less frequently but yield larger profits when they do. In comparison, higher values trigger more frequently but with lower profits.

Short-Duration Options

As mentioned in the earlier Yield Vault section, the shortest option duration on Typus is 10 minutes, and the longest is 1 month. Compared to other options markets, Typus offers the option of short-duration options. This is a very useful tool for event traders. In general, the leverage for 10-minute options exceeds 300x, and when volatility is expected to increase (due to a triggering event), using a long volatility strategy with double options can provide substantial profit opportunities.

For vault depositors (options sellers), shorter durations provide more frequent profit opportunities and also attract more crypto “gamblers,” which in turn makes the yields for sellers equally attractive.

Optimized Dutch Auction

Options Bidding

When a buyer purchases options on Typus, they use Typus’s optimized Dutch auction method. When the auction begins, the purchase price (option price) decreases over time. Buyers can submit the amount of options contracts they wish to purchase during the auction. At the end of the auction, the final purchase price is set based on the last bid price, which serves as the settlement price (delivery price). If the auction is not fully subscribed, the contracts will be settled at the minimum price.

In simple terms, as shown in the diagram, the maximum size for this particular option type is 2,845,517 SUI. At the end of the subscription period, two possibilities exist: one is that the maximum size is fully subscribed, in which case the price of a single contract will be the minimum (last) auction price. The other possibility is that the maximum size is not fully subscribed, in which case each contract will be priced at 0.0017.

Main Advantages of the Optimized Dutch Auction

Lower Costs for Buyers
For options sellers, especially retail investors, determining the option price and submitting orders is much more complex than waiting for other bidders’ behavior to guide their pricing. Typus aims to simplify the decision-making process for users as much as possible (this intent is also reflected in the seller vaults). Buyers only need to click once to bid on options.

More Attractive Option Fees as Incentives for Option Underwriting
The Nash equilibrium logic behind the optimized Dutch auction model is that all buyers will truthfully express their willingness to pay. This allows options sellers to secure a fair option fee. Given the high risks for options underwriters, higher option fees can serve as an incentive to increase participation.

Trade-off Between Certainty and Lower Costs for Buyers
Buyers must weigh the trade-off between certainty and a lower purchase cost in each auction. While the option price decreases over time, buyers are unsure when the maximum size will be fully subscribed. Therefore, they must choose between the contract size and the minimum cost price. Buyers fear missing out on the subscription, so they may be willing to pay a higher premium to secure the option contracts. This mechanism drives the option fees closer to their intrinsic value within the game.

Faster Launch of New Vaults
Since the optimized Dutch auction does not require off-chain arbitrage to provide liquidity, it allows for the rapid creation of vaults for any new underlying asset (with sellers participating). This increases user engagement and the speed at which new opportunities are available.

SAFU

SAFU (Secure Asset Fund for Upside) is the first capital-preserving structured product on the Sui ecosystem. It offers secure returns with a 99.99% principal protection rate, zero fees, and potential upside through options. The product aims to maximize returns while ensuring safety.

SAFU Product

The essence of SAFU is a structured product. Interest is earned by depositing the principal into a lending protocol on Sui in collaboration with Typus. This interest is then used to purchase different types of options on Typus. The entire process involves purchasing options after the interest has been generated, which ensures that fluctuations in lending rates won’t result in situations where costs cannot be covered, achieving a 99.99% principal protection.

This type of product carries much lower risk compared to directly buying options. The primary risk comes from the lending rate, with the options as an additional benefit. This makes it more suitable for users with a low-risk preference.

Tails

Tails is a dynamic NFT, which can be understood as a form of experience points (EXP) or level certificate. When users act as options sellers or buyers, or participate in SAFU, they earn EXP, which is used to upgrade their Tails. Additionally, Tails can be bought and sold on secondary markets.

Uses of Tails Levels

Profit Sharing: The higher the Tails level, the larger the share of rewards received from the profit-sharing pool. Tails level rewards ensure that rewards are fairly distributed to those who contribute the most to Typus. Tails Dice is a gambling mini-game on Typus, and its profits are distributed weekly to the profit-sharing pool.

Tokenomics

What is $TYPUS?

$TYPUS is not just a token, it is also the key to participating in earning within the TYPUS Finance ecosystem. \
The total supply of $TYPUS is currently 1,000,000,000 tokens.

$TYPUS Token Utility

Governance: Vote on important protocol decisions (via $veTYPUS).

Yield Enhancement: After liquidity pool mining is enabled, $TYPUS will be used to amplify yields.

Exclusive Features: Unlock advanced trading tools and products.

$TYPUS Token Distribution

Token Distribution Model and Unlocking Path
Image Source:https://x.com/MrBreadSmith/status/1856709511513325923

1. Ecosystem (45%)
   • Community: 35% for rewards and incentive programs
   • Treasury: 5% for ecosystem growth, partnerships, and platform development
   • Airdrop: 4.5%
   • User Growth: 0.5% for spreading information about Typus Finance
2. Stakeholders (25%)
   • Core Team: 25%
   • Partners: 0%
   • Tokens allocated to stakeholders will begin to unlock linearly after 12 months, until full vesting is completed.
3. Liquidity (10%)

Airdrop Details

$TYPUS Airdrop Distribution

Typus recently conducted the token’s TGE (Token Generation Event). The primary recipients of the airdrop were vault depositors (options sellers), bidders (options buyers), and Tails holders.

TYPUS Options Airdrop

For users who meet specific conditions, this airdrop, in addition to $TYPUS, also provided daily call options for $TYPUS at a certain scale. Under the design of the options, additional $TYPUS can only be received once the token price reaches a certain level. This not only offers additional incentives to early users but also helps reduce token sell pressure that often accompanies one-time airdrops.

Bluefin-based Airdrop for Typus

Although $TYPUS has already had its TGE and conducted the first round of airdrops, there is still potential for mutual incentives between different protocols due to the recent hype around the Sui ecosystem. The image above shows the airdrop given to Typus by the decentralized exchange, Bluefin, on the Sui ecosystem.

Conclusion

As an options protocol, Typus’s core philosophy, evident from the design of its vaults and products like SAFU, is to reduce the entry barrier for users, turning options sellers into depositors and investors. Its unique 10-minute options and optimized Dutch auction provide more trading tools and price discovery mechanisms for the market.

As the influx of capital increases, the demand for options is also growing in the cryptocurrency market. Compared to older order book-based options protocols, Typus takes a user-centric approach, embodying the spirit of blockchain innovation by offering an alternative, forward-thinking model.