Why Are European-Style Options More Common than American-Style Options in Decentralized Options Protocols?

European-style options are more common in decentralized options protocols because their exercise mechanism is simpler to code and manage within smart contracts. Since they can only be exercised at expiration, the protocol does not need to constantly monitor for early exercise or manage the complexities of early assignment, which is computationally expensive and difficult to execute efficiently on-chain.

This simplicity reduces gas costs, minimizes smart contract complexity, and facilitates more straightforward pricing models.