Garten Finance

Abstract Garten is an evolution of the first forays into the option market that were done by Opyn, Hegic and others. We aim to expand upon the fundamental infrastructure created by previous protocols whilst also creating a value chain that encourages key stakeholders (buyers, sellers and liquidity providers) to engage in the platform. Options are a fundamental component of financial markets as they provide a transfer of risk to investors, however these have yet to be effectively deployed in the DeFi ecosystem.

The core challenge in any DeFi product is providing consistent liquidity. To overcome this, Garten uses a unique system in which both liquidity providers and depositors compete to sell tokens to buyers. These sales will be done through the vault in communal fashion selling all available tokens pro-rata across multiple vaults.

Key Benefits Gartens unique structure provides value to each participant in the following manners:

Sellers (lets call her Alice for the remainder of the paper) Earn interest on the collateral they deposit Earn Premiums on options tokens sold Issue options on any tokens Sell tokens option tokens directly to buyers through the attached liquidity pool and earn trading fees Diversify risk by selling tokens in a communal vault Withdraw option tokens and sell them directly on any DEX or CEX Physical settlement to only result in impermanent loss. Earn $Stein tokens

Buyers (Bob for the remainder of this paper) Access to Liquid markets Access across large number of underlying tokens Provide price ceilings and price floors to minimize risk Large potential returns Earn $Stein tokens

Liquidity providers Earn trading fees Buy directly from the vault and stake liquidity directly Retain ability to exercise option tokens Earn $Stein tokens

Stakers Stake the $Stein tokens to earn a percentage of the trading fees Key Differences against existing Option Protocols User driven pools rather than chosen by the platform, to wrap any token in an option American Options to create impermanent loss rather than permanent loss Liquidity providers compete with sellers for trading fees. Communal collateralization pool, to minimize and spread sales, and the distribution of collateral/underlying Rotating pools for rewards, that will drive liquidity in target options The remainder of this paper will explore the core concepts behind the Garten structure and how a revenue model is created that generates value for all participants in the market.