What Risks Are Introduced by Removing Traditional Intermediaries in Options Trading?

Removing traditional intermediaries, like clearing houses, introduces risks such as smart contract code vulnerability and counterparty default without central oversight. Code bugs can lead to irreversible loss of funds.

Furthermore, while the settlement is automated, the lack of a central guarantor means users must rely on the platform's collateralization mechanisms to mitigate counterparty risk. Regulatory uncertainty is also a significant factor in this nascent decentralized environment.