Can a Decentralized Options Protocol Use a Decentralized Stablecoin for Margin?
Yes, decentralized options protocols frequently use decentralized stablecoins (like DAI) for margin and settlement. The stablecoin provides a low-volatility, on-chain asset that minimizes price risk for both the option buyer and writer.
Using a decentralized stablecoin also maintains the non-custodial and trustless nature of the entire derivatives protocol.