Smilee
Decentralized options protocol for market volatility trading.
| Date | Investors | Amount | Round |
|---|---|---|---|
* | $2.0m | Seed | |
| Total Funding | 000k | ||
Smilee Finance is a decentralized finance (DeFi) protocol that enables users to trade on market volatility. Founded in 2022 by Alberto and Tempesto, who have backgrounds in traditional finance and options trading, the company is officially based in Weymouth, United Kingdom. The founders' journey began in 2019-2020 when they decided to delve into the DeFi space to address its inefficiencies and fragility.
The protocol's core innovation is the creation of Decentralized Volatility Products (DVPs), which are vault-based strategies that generate payoffs based on market movements. This system transforms the concept of 'Impermanent Loss' (IL)—a risk for liquidity providers in automated market makers (AMMs)—into a tradable feature called 'Impermanent Gain'. Users can speculate on volatility through various options without the risk of liquidation, with leverage up to 1000x. Smilee offers products for both traders and liquidity providers. The "Trade" product allows users to bet on volatility through Bull (upward movement), Bear (downward movement), or Smile (any significant movement) options. The "Earn" product lets liquidity providers deposit assets to generate a stablecoin yield from the premiums paid by traders and other fees.
Operating on the Arbitrum network, Smilee uses a synthetic concentrated liquidity automated market maker (CLAMM) and a Liquidity-to-Volatility-Engine (LTVE) to power its offerings. This structure is designed to be efficient and user-friendly, mitigating issues like MEV (Maximal Extractable Value) and removing the need for users to manually set liquidity ranges. The business model revolves around the fees generated from trading activity and providing liquidity. In October 2023, Smilee raised $2 million in a seed funding round led by Dialectic, with participation from Synergis Capital, Outlier Ventures, and others.
Keywords: decentralized finance, DeFi, volatility trading, impermanent loss, impermanent gain, decentralized volatility products, DVP, options protocol, Arbitrum, crypto derivatives, yield generation, liquidity provision, CLAMM, stablecoin yield, on-chain options, market volatility, leverage trading, structured products, Synergis Capital, Outlier Ventures