Hedge

For the AMO to receive sustainable returns, the Keep protocol will locate some option pools, including Ribbon Finance, Stakedao, Thetanuts Finance, and Friktion Finance, and access crypto-structured products on various decentralized networks.

To prevent significant drops in the price of the collateral, the protocol will also take into account constructing a controller that takes a set amount of collateral and correctly hedges it with a reverse/short position. This will result in an underlying trade with net-zero volatility. For instance, we are investigating collateral units (such as Eth-iETH) that reverse the asset against the asset itself using Synthetix to create ideal hedges.