Buy receipts that pay realized variance, or write them from a vault only you own. Both sides of the market are quoted on chain, every unit sold is fully collateralized, and settlement is computed from Chainlink's own round history.
Trailing realized volatility from Chainlink ETH/USD, the same feed every market settles against. Bars show vol as a share of 100%.
Each market quotes an executable bid and ask on both sides. The quote rises as long inventory sells, falls when holders exit, and every row is read from the on-chain Lens rather than estimated here.
Each writer has their own non-upgradeable vault. Every unit sold reserves its capped payout there, and the reservation is released only when the receipt is burned, on exit or on redemption.
createGroup deploys both receipts, mints the inventory into the writer's own vault and ships ISSUE, EXIT and SETTLE for each side to 1inch Aqua, all in one transaction. Because long and short cannot both pay out, the two sides lock one shared reserve instead of two.
market.createGroup(vault, params)The market quotes both sides around what it projects for the window. Net long demand lifts the quote and an exit reverses it exactly, because the skew is derived from outstanding inventory rather than stored. A fill is the integral over a rising ask, so size pays impact honestly, and every unit sold reserves its capped payout before the fill can settle.
premium = N·(ask·u + slope·u²/2)Anyone walks the window forward in bounded permissionless checkpoints, and anyone finalizes it. Long redeems for S·min(RV/cap, 1) and short for the exact remainder, so the pair always pays S. No keeper, no deadline, nothing needed from the writer.
RV = Σ ln(Pᵢ/Pᵢ₋₁)² · 365d / TEstimate the gross LVR variance notional from pool value and horizon, then compare the executable cost and the available depth. Premium, the cap, discrete expiries and oracle basis keep it from being an exact hedge.
units = (V·T/8) / unitNotionalEstimate gross variance notional from V·σ²·T/8, then compare live receipt cost and capacity. Premium, caps, maturity and oracle basis mean this is not an exact hedge.