POLYSYNTH — The First-Ever DeFi Option Vaults Protocol on Polygon

GAINS Associates
5 min readJul 19, 2022

Polysynth is Polygon Network’s first DeFi Options Vault (DOV) and Perpetual Futures Exchange, Polysynth Protocol allows you to profit regardless of the state of the market. Polysynth can support quick transactions at almost no gas cost because Polygon fuels its system. Polysynth Option Vaults make it simpler for investors to maximize the value of options over the long term.


DeFi Option Vaults (DOVs): Standing true to the nature of DOVs, Polysynth’s Option Vaults make it easier for investors to make the most out of options in perpetuity. The option vaults replace the complicated underwriting, pricing, and juggling of strike prices with a straightforward deposit and an auto-compounding earning vault.

These options allow you to;
- Simply deposit assets and auto-compound your wealth in all market conditions
- Get access to improved capital efficiency with support for liquidity and yield-bearing tokens
- Get access to 100% on-chain, non-custodial investing
- Earn sustainable yield by options selling instead of token farming
- Enjoy higher liquidity for underlying option contracts — more depth and variety of products

Perpetual futures

They are non-expiry future contracts that let traders make predictions about the price movement of an underlying asset without actually owning the underlying asset by purchasing (long) or selling (short) the contract.

Perpetual futures allow you to;

- Go long or short on any asset
- Trade with up to 10X leverage
- 100% on-chain and non-custodial trading
- Trade & Settle in stablecoins

How does it work?

Polysynth’s smart contracts take care of automatically compound investor wealth; users only need to deposit assets. Investors only need to pay gas fees at the time of deposit or withdrawal; all subsequent operational gas fees are handled by Polysynth. Even 99 per cent APY is typical with Polysynth DOVs, and all yields are paid in the same asset that the investor deposits.

DeFi Option Vaults could be a game-changer for crypto derivatives as they offer a scalable way to manage non-linear risk.

Polysynth is equipping investors with better risk management tools where investors’ earnings get compounded weekly. For example, if you deposit $1,000 in the BTC Cash-Covered Put strategy today, you are likely to have $1991.20 in a year based on the projected APY. All the returns are paid in the base asset of the strategy itself ensuring the returns are sustainable, and being non-custodial ensures that investors will always have full control of their assets.

What makes Polysynth different?

Polysynth provides a wide range of strategies, as opposed to other options platforms that offer strategies that are limited to more asset classes. This defeats the purpose of options given how heavily correlated crypto assets are. Contrarily, a wide variety of techniques allows investors to profit in all market conditions by using various strategies that are adapted for particular scenarios and that is what Polygon is here for!

Currently, BTC & ETH Covered-Call and BTC & ETH Cash-Covered Puts are LIVE. These links contain results from the backtesting of the strategies. A covered call is a financial strategy wherein the investor selling a call option owns an equivalent amount of the underlying security and Cash Covered Puts is a financial strategy wherein the investor deposits stablecoins such as USDC into the option vault to sell an out-of-the-money put option. All these strategies have been carefully thought through and tested to enable users to maximize yield.

What’s even more astounding is that all of Polysynth’s strike selection algorithms have been back-tested using data spanning a full year. As an illustration, their covered call strategy using ETH generates an annualized return of 35.89% with a Delta of 0.1. 💪

Polysynth has Degen Vaults in the pipeline with higher risk-return payoffs and Leveraged Vaults, a first in the industry that will enable investors to turbocharge their returns by up to 5X. Based on the backtest, the Covered Call Degen Vault would have yielded 73.69% with Delta at 0.3 and with Leveraged vaults, the Covered Call Degent Vault could turbocharge your APY to 368.45%.

Treasury yield-maximizing tool for DAOs:

Projects and DAOs now sit on assets worth hundreds of millions of dollars with few and low-yielding deployment options. Polysynth Option Vaults (POV) are the ideal venue for treasuries to deploy their treasury assets.

It is easier for treasuries to utilize covered calls to maximize yield since treasuries hold blue-chip assets such as BTC & ETH and if the covered call expires in the money, they will still be up greatly in dollar terms. 💵

Treasuries can earn additional profit by utilizing cash-covered puts with stablecoins like USDC, and even if the option expires in the money, they will still be able to accumulate BTC and ETH at a discount. Impressive!

Polysynth Option Vault Refer & Earn Program

With Polysynth, you can make money in a variety of ways. From the time of the referral until June 30, 2023, the referrer will get a 25% share of the management fee collected by the referee. Any user can create a distinctive referral link by just linking their Polysynth wallet. Polysynth’s referral program allows you to refer as many individuals as you like, and the amount of referral cash that can be earned is not limited. A fantastic way to earn money! 🤑


POL is Polysynth’s native protocol token. The POL token will be a standard ERC-20 token on Ethereum.

It is a utility and governance token that allows the Polysynth Community to truly own and govern the Polysynth protocol. Holders of POL tokens accrue voting rights proportional to their holdings. By enabling shared control, POL aligns incentives between the Team, Community, Traders, Investors and Partners of the Polysynth ecosystem.

Token use cases

- Protocol governance (casting a vote or creating a proposal)
- Liquidity Mining
- Staking rewards
- Trading fee rebates
- Airdrops

Investors and Partners

Polysynth has highly influential investors which include Jump Crypto, Hashed, DeFi Alliance, Smape, Polygon Founders, and various other crypto-native VCs.

Additionally, they have partnered with top-tier projects including Opyn, QCP, Ledger Prime, and Chainlink.



GAINS Associates

Join our community and invest in crypto startups by staking $GAINS tokens. http://t.me/GainsChat & http://t.me/GainsANN! 🚀🔥