How Can a Decentralized Options Protocol Integrate with MEV Mitigation Tools?
A decentralized options protocol can integrate by using a private transaction relay for its settlement or liquidation transactions. This prevents searchers from front-running the liquidation, which could lead to an unfair profit or instability.
It can also utilize TWAP oracles to make the price target for options settlement harder to manipulate.
Glossar
MEV Mitigation
Strategy ⎊ MEV Mitigation involves implementing protocol designs and off-chain coordination mechanisms intended to reduce or redistribute the economic value captured through transaction ordering manipulation, aiming to restore fairness to the block construction process.
Decentralized Options Protocol
Protocol ⎊ A decentralized options protocol is a set of smart contracts and rules enabling the creation, trading, and settlement of options contracts on a blockchain.
Options Protocol
Architecture ⎊ The underlying design dictates how options are tokenized, collateralized, and ultimately settled using deterministic code execution.