Why OTC

The Hidden Reality of Altcoin Options

Only about 25% of altcoin options volume flows through exchanges - most of it occurs OTC. This statistic reveals a profound truth about the current state of altcoin options trading. The majority of sophisticated traders have been forced to operate in private, over-the-counter markets due to significant limitations in existing public exchange infrastructure.

This fragmentation creates an ecosystem of inefficiency that impacts all market participants, from retail traders to institutional investors. When 75% of volume exists outside public exchanges, the entire market suffers from reduced transparency, price discovery challenges, and limited access to sophisticated trading strategies.

Current Market Challenges

Exchange Limitations

Traditional cryptocurrency options exchanges face several critical shortcomings when dealing with altcoins:

Thin Orderbooks

Most altcoin options suffer from inadequate market depth. This results in significant price impact when executing larger orders, making it nearly impossible to implement sophisticated options strategies without moving the market against yourself.

Wide Spreads

The bid-ask spreads for altcoin options frequently exceed reasonable levels, often reaching 5-10% or more. These excessive spreads essentially function as hidden fees, dramatically reducing profitability and making many potential trades economically unfeasible.

Rigid Strike Prices and Expiry Dates

Exchanges typically offer a severely limited selection of strike prices and expiry dates. This one-size-fits-all approach fails to meet the diverse needs of traders who require precision in their risk management and speculation strategies.

The Unique Nature of Altcoin Markets

Several factors make altcoin options trading particularly challenging:

Rapid Market Rotation

The altcoin market moves quickly, with new assets regularly capturing market attention and liquidity. Exchange infrastructure struggles to keep pace with this rotation, frequently lacking options for the most relevant assets during critical market moments.

Customization Requirements

Altcoin holders have diverse needs requiring tailored approaches. A token founder with significant holdings has fundamentally different hedging requirements than a speculative trader or a long-term investor.

Inadequacy of Traditional Models

Standard options pricing models often fail to accurately capture the unique volatility characteristics of altcoins, creating persistent mispricing issues in traditional exchange environments.

Introducing Aevo Options OTC 2.0

A Revolutionary Approach to Altcoin Options

Aevo Options OTC 2.0 represents a paradigm shift in altcoin options trading. Built as an on-chain OTC desk operating on the Aevo L2 network, it brings institutional-grade liquidity and experience directly to traders of all sizes.