Financial Engineering in DeFi - TOKEN2049 London 2022
Explore the cutting-edge intersection of financial engineering and decentralized finance (DeFi) in the engaging presentation, "Financial Engineering in DeFi," captured at TOKEN2049 London 2022. Join Jeremy, head of cone strategies at Ribbon, as he delves into the evolution and application of structured products within DeFi, offering profound insights rooted in traditional finance (TradFi) methodologies.
Throughout this session, Jeremy dissects two pivotal types of structured products: yield enhancement and principal protected products. He elucidates how tradfi practices such as selling downside volatility and utilizing options with innovative features—like down-and-in puts and worst-of options—can optimize yield but also introduce higher risk levels. By leveraging these sophisticated financial instruments, participants can gain exposure to potentially lucrative payoffs while navigating the inherent risks, including correlation and credit risks.
Further, the talk highlights advancements and new opportunities within DeFi protocols, like liquid staking and interest rate swaps, that counterbalance the risks associated with traditional products. Examples such as Lido's yield generation from liquid staking demonstrate how DeFi can replace uncollateralized lending, paving the way for safer and more transparent investment products.
Jeremy introduces Ribbon's new product, EARL, exemplifying the pinnacle of DeFi structured products with no credit risk, fully on-chain implementations, and opportunities for both yield and upside participation.
Do not miss this insightful discourse that underscores how DeFi is redefining financial structuring. Engage with the content—like, comment, and subscribe to our channel for more cutting-edge discussions from TOKEN2049!
