Aevo is part of the Ribbon family of products. The Ribbon team is working on both products (structured products & options exchange). At launch, the exchange will run without any token-related economics until it achieves meaningful scale.
Eventually, Aevo will be integrated with Ribbon as the venue where Ribbon’s options contracts settle. This means that Ribbon Vaults can drive consistent flow to Aevo (currently ~$80m a week), and Aevo can allow for much more sophisticated vault structures to be built on top — a perfect harmony of vault + exchange.
Yes, users can hedge their vault positions by buying options on Aevo. But there are more potential developments! For example, Ribbon users’ funds may no longer need to be locked up from a week-to-week basis. They can exit their vault position anytime by simply closing the position on the exchange. Users will also be able to take profit on or cut losses on their vault positions, since there will be a venue with high liquidity to trade these positions.
Ribbon Auction participants will benefit greatly from this integration. Instead of sitting on oTokens in their wallet until expiry, market makers can use these vault positions as real positions on an exchange — giving them margin to trade more things, take profit, hedge, and so on. We think this will attract much more interest in the Ribbon Auctions and will make pricing more competitive.