How Are Token Standards Applied to Create On-Chain Financial Derivatives like Options? ▴ Learn

How Are Token Standards Applied to Create On-Chain Financial Derivatives like Options?

Token standards define the structure and behavior of the derivative contract. An options contract can be represented as an NFT (ERC-721), where the unique token ID contains the strike price, expiry, and underlying asset.

Alternatively, a standardized, fully collateralized derivative position can be represented by a fungible token (ERC-20), allowing for easy trading and integration into DeFi protocols.

What Is the Fundamental Difference between Fungible and Non-Fungible Tokens in a Financial Context?

How Does Fractional Ownership of NFTs Impact Their Use as Collateral in DeFi Lending?

What Is the Fundamental Difference between Fungible and Non-Fungible Token Standards?

What Is the Difference between Fungible and Non-Fungible Tokens (NFTs)?