Hi PsyOptions Community - We’re working on an option strategy vault (Tap Finance) that will mint options at weekly epoch intervals and sell them to generate yield for our users. With our current strategies, our models predict roughly 30-40 bps of yield per epoch.
Given Psyoptions has a flat 5bps minting fee, a non-trivial portion of our yield will be diverted to pay for fees, reducing attractiveness of the vaults for users.
Can we propose/discuss a variable fee model based on tenor of options? Open to suggestions, but a simple proposal could be:
- Options Tenor <= 1 week → 2 bps
- Options Tenor = 1 week - 4 weeks → 4 bps
- Options Tenor > 4 weeks → 5bps
Pros of this approach:
- Incentives options minting at shorter tenors thereby increasing protocol volume
- Unlocks more advanced option strategies utilizing variable tenors and hedging
- Reduced Fees (can be offset with increased option minting)
- Development Effort
Would love to hear the team and communities thoughts on this. Ultimately we want to provide the highest yields possible to users so that both the Tap Finance & PysOptions ecosystem can grow.