The Pricing Issue

The art of pricing derivatives is a well-established and mature discipline within TradFi. Financial institutions have dedicated substantial resources and recruited top-tier engineers to master the intricate nuances of derivative pricing across diverse asset classes. However, the landscape of crypto derivatives is still very much in its infancy and is still far away from any maturity in the field of pricing. While there is certainly a lack of comparable resources to be spent in this field, it is also the fact that the crypto world also presents unique challenges, primarily attributed to the extreme volatility characterizing these digital assets.

This volatility factor exerts a significant impact on the valuation of crypto derivatives, affecting a wide spectrum of derivatives, including structured products. At Dirac Finance, we place a paramount emphasis on pricing accuracy. Precise pricing holds a twofold advantage, enabling us to execute trades at the right price and implement effective hedging strategies. As part of our commitment to excellence, Dirac Finance is actively investing in the development of crypto volatility surface modeling and the pricing of derivatives across the entire spectrum of crypto assets. This dedication underscores our relentless pursuit of precision in every aspect of our protocol.