BNB Chain Spotlight: Thetanuts

2022.3.16  •  5 min read
Blog post image.

Today, we're bringing you another interview from the Spotlight series. We talked to Thetanuts, a new protocol that helps users access crypto structured products on multiple decentralized networks to generate a return for their portfolio.

Without further ado, let's get into the interview!

Spotlight on Thetanuts

IMPORTANT: Please note the following content does not constitute an endorsement or approval of any of the products, services, or views of the project, organization, or individual interviewed in this article.

Matt: It's great to have you under the Spotlight, Thetanuts. As this is your first time under the Spotlight, let's start with a brief introduction. Tell us what you do and what's unique about Theta Nuts?
Thetanuts is a multi-chain structured products protocol that offers users our first product - DeFi option vaults, sustainable risk-adjusted yield via automated strategies.

What differentiates Thetanuts is our ethos that simple strategies should be feeless. Many teams take high fees on simple strategies, and that can hurt returns for users, especially in volatile market conditions. We are building our fee structure around ancillary products that we have created uniquely to provide high value. This achieves a balance between protecting the base yield and protocol profits.

We are about to launch our Theta-Index, a diversified basket of individual option vaults.

This overcomes two key challenges in the DOV space - individual call/put option vaults. (1) Users can swap in and out quickly. Previously they were locked in the vaults throughout the entire vault tenor. (2) Users are better off risk-adjusted as their yield is accumulated via an index rather than a concentrated position.

Matt: How did you come up with the name Thetanuts, and when was the whole idea born? It's pretty…interesting, let's say.
The name Thetanuts originates from the concept of Time Decay from options. We hope our users get Nuts over Theta because each option expiry Out-of-the-money means another round of premiums and gains!

Matt: You're one of a very few projects that launched without having their own token in circulation. What led you to this decision?
We started our project with the view that finding product-market fit was a key imperative. When a token generates TVL, it can temporarily distort or hide specific product weaknesses. However, once inflation reaches an inflection point, TVL begins to leave. Therefore, we've taken our time to refine our product and improve to reach a degree of product maturity before actual governance via a token might make sense.

Matt: What is Thetanuts DAO Treasury Management? How does it work?
Thetanuts DAO treasury management enables protocol teams to create markets for their tokens tailored to their specific needs. With Woo, the objective was to create markets and diversify treasury; hence they decided to go with physically settled vaults. With our BIT community members, we went with cash-settled vaults to encourage the creation of a BIT options market. As we mature, we want to work with various DAO treasury teams to encourage the deployment of stables into our vaults to generate yield, allowing them to be self-sustaining.

Matt: Can you introduce us to your team? What experience do you have?
Our team includes cryptography research scientists, developers from brand names companies, and contributors who have been actively involved in the DeFi space. As a small and agile team, we operate a flat leadership structure that allows our operators in the core team to maximize their potential. We have also received much support from our Discord community, who have been submitting quality research. We're currently hiring for smart contract developers and front end.

Matt: On March 1, you announced a successful seed round with $18 million in funding. How do you plan to use the funds?
We were fortunate to receive investor backing from Three Arrows, Deribit (the world's largest crypto options platform), Jump Crypto, and QCP Capital, among many others. We see that DeFi options flow well into CeFi and have a complementary effect. Much of the funds will be deployed into our Protocol to generate yield, and a portion is for team development.

Matt: As Thetanuts grows bigger, you have to protect a lot of funds and user data. What is your security strategy?
We believe that as the DeFi is constantly evolving and as the ecosystem matures, so will there be more sophisticated attack models. Therefore, we focus on having a constant audit cycle to ensure we're up to date with the latest attack techniques and have coverage with multiple auditors.

Matt: Why did you decide to build on the BNB Chain?
Thetanuts is a multi-chain protocol. However, we were particularly attracted to building on the BNB chain because of the thriving BNB Chain ecosystem and close connection to the Binance exchange. The first interaction for DeFi users might often be via Binance to the BNB chain. This creates a frictionless experience where onboarding becomes significantly easier.

Also, Binance-pegged tokens mean we can create option vaults for various major tokens such as ADA without being on the Cardano chain. This provides yield generation opportunities never seen before.

Matt: As we're getting to the end of the interview, let's talk about the future. What do you see as the main challenge for the future of DeFi? What new features can we expect from you in the upcoming months?
We are bullish on DeFi adoption globally. One observation in the current macro condition is that centralized companies quickly ban the entire populace from goods and services arbitrarily without warning. We see increased adoption among these peoples for DeFi native products as self-custody becomes much more attractive, and this can and might reach a tipping point that shifts a majority across in the curve.

The second observation is that there is strong demand for sustainable stables yields. Currently, existing DeFi projects can provide up to ~20%; however, the sustainability of these endeavors can be questionable. Whereas it can be possible with Thetanuts. So we believe that by radically simplifying the experience with Theta-Index, users will shift across to our product for that sustainable yield, and we progressively grow the structured products ecosystem.

Matt: What's the most surprising fact about the Thetanuts story?
Our diet does not consist only of nuts, even though we are nuts about building. Haha.


Follow us to stay updated on everything BNB Chain!

Website | Twitter | Telegram | Youtube | Gitcoin | Discord | Build N' Build Forum

Share