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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.

How Does the Use of Stablecoins Facilitate DVP in Cryptocurrency Derivatives?
How Does Using Stablecoins Reduce Counterparty Risk in Derivatives?
How Does the Use of Stablecoins as Collateral Affect the Effective Leverage in Crypto Futures?
How Does a “Hash Time-Locked Contract” (HTLC) Facilitate Trustless On-Chain Settlement?