Siren Flow Architecture

PreviousUse Cases NextHybrid Pricing Model

Last updated 1 year ago

Siren Flow Architecture

Siren Flow is fundamentally a two-sided marketplace, consisting of a capital-efficient system for pooling liquidity that generates yield for Liquidity Providers (LPs) by facilitating trading; and a protocol that automates the entire lifecycle of options trading and settlement, creating competitively-priced markets across a wide range of available assets.

Let's dive into all the components that comprise Siren Flow and how they interact in order to deliver a simple yield-generating unified pool experience for LPs and a seamless, fairly-priced trading system! Siren Flow aims to provide a trading experience that is comparable to what traders expect from a centralized exchange (CEX), while still taking advantage of the self-custody benefits of DeFi.

The protocol consists of the following major components:

Quote Providers. Off-chain services that respond to requests-for-quote (“RFQs”) from traders and generate cryptographically-signed orders that are executed in the Hedged Liquidity Pool. A single order can contain one or more options trades that are executed together.
Hedged Unified Liquidity Pool. An on-chain smart contract responsible for pooling the unified collateral (USDC) deposited by liquidity providers and market-making options across many available assets. The pool accepts signed orders from Quote Providers and executes them on-chain. Delta exposure in the pools is managed via Hedgers — specialized integrations with perpetual and DEX protocols.
Hedgers. On-chain smart contracts that integrate with perpetual and DEX protocols to delta-hedge pool exposure. Hedgers receive instruction from the Hedge Keeper, an off-chain service responsible for triggering hedge updates.
Hedge Keeper. An off-chain service responsible for proactively delta-hedging pool exposure.
Margin Manager. A set of on-chain smart contracts responsible for managing options margin. The margin manager allows for a portfolio of multiple call/put options for a single underlying asset and evaluates margin requirements holistically, taking into account contracts that offset each other. The manager also settles options post-expiry.

PreviousUse Cases NextHybrid Pricing Model

Last updated 1 year ago

The protocol consists of the following major components:

Quote Providers. Off-chain services that respond to requests-for-quote (“RFQs”) from traders and generate cryptographically-signed orders that are executed in the Hedged Liquidity Pool. A single order can contain one or more options trades that are executed together.
Hedged Unified Liquidity Pool. An on-chain smart contract responsible for pooling the unified collateral (USDC) deposited by liquidity providers and market-making options across many available assets. The pool accepts signed orders from Quote Providers and executes them on-chain. Delta exposure in the pools is managed via Hedgers — specialized integrations with perpetual and DEX protocols.
Hedgers. On-chain smart contracts that integrate with perpetual and DEX protocols to delta-hedge pool exposure. Hedgers receive instruction from the Hedge Keeper, an off-chain service responsible for triggering hedge updates.
Hedge Keeper. An off-chain service responsible for proactively delta-hedging pool exposure.
Margin Manager. A set of on-chain smart contracts responsible for managing options margin. The margin manager allows for a portfolio of multiple call/put options for a single underlying asset and evaluates margin requirements holistically, taking into account contracts that offset each other. The manager also settles options post-expiry.

NOTE: This is a living document that will continue to be updated as Siren evolves. To contribute, please visit . Specific questions may be answered and technical guidance may also be provided from time to time in the to those who are interested in building on top of the protocol.