How Does the Black-Scholes Model Relate to the Pricing of Tokenized Options? ▴ Learn

How Does the Black-Scholes Model Relate to the Pricing of Tokenized Options?

The Black-Scholes model provides a theoretical framework for estimating the fair price, or premium, of European-style options. It considers five inputs: the underlying asset's price, strike price, time to expiration, risk-free interest rate, and volatility.

For tokenized options, it can be adapted by using decentralized interest rates and real-time asset prices from oracles to calculate a fair tokenized premium.

What Are the Five Primary Inputs of the Black-Scholes Model?

Which Options Pricing Model Incorporates Volatility?

How Does the “Black-Scholes-Merton” Model Relate to the Concept of an Option’s Fair Value?

How Does the Black-Scholes Model Relate to Crypto Option Pricing?