Deep Tide TechFlow news: On June 01, Vitalik said it may be worth considering building assets that track index exposure in DeFi using options instead of collateralized debt positions and liquidation mechanisms. The core idea is that when prices experience extreme volatility, risk exposure no longer triggers centralized liquidations, but rather departs from the target index exposure in a smoother way.

Vitalik said that one of the main advantages of this design is that it does not require immediate oracles and can run based on a “slow oracle”; however, the drawback is that it needs periodic rebalancing, and whether rebalancing can be sufficiently resistant to slippage remains an open question. He also said that compared with schemes that rely on real-time oracles, he would feel more at ease holding algorithmic stablecoins within structures like this.