Options Overview

HyperQuote Options is a permissionless, on-chain options protocol built on HyperEVM. It extends the HyperQuote RFQ system to support covered calls and cash-secured puts with physical settlement, ERC-721 position NFTs, and a commit-reveal settlement oracle.

Supported Instruments

HyperQuote V1 supports two vanilla option strategies:

Both instruments are European-style: they can only be settled at expiry, not before.

Underlying Tokens

In V1, the only supported underlying asset is wHYPE (wrapped HYPE). Native HYPE is automatically wrapped to its ERC-20 form for on-chain settlement. The OptionsEngine contract enforces an allowlist of underlying tokens via allowedUnderlying, and the contract owner can add new underlyings in future versions.

Collateral Tokens

Premiums and put collateral are denominated in stablecoins. V1 supports three collateral tokens:

• USDC (6 decimals)
• USDH (18 decimals)
• USDT0 (6 decimals)

The contract enforces an allowlist via allowedCollateral. The CollateralMath library handles decimal scaling between 18-decimal underlyings and 6-decimal or 18-decimal collateral tokens automatically.

Expiry Constraints

Every option must have a valid expiry timestamp that satisfies three rules:

1. Time-of-day snap — The expiry must fall exactly at 08:00 UTC on a given day. The contract enforces expiry % 86400 == 28800.
2. Minimum duration — The expiry must be at least 24 hours in the future from the time of execution.
3. Maximum duration — The expiry must be no more than 90 days in the future.

The UI automatically snaps user-selected expiry dates to the nearest valid 08:00 UTC timestamp within these bounds.

ERC-721 Position NFTs

When a quote is executed, the OptionsEngine mints an ERC-721 NFT (token name: “HyperQuote Option”, symbol: “HQOPT”) to the buyer (maker). This NFT represents the buyer’s right to exercise the option at expiry. The NFT is burned when the position is settled or expired.

Each position stores the full deal terms on-chain: seller, buyer, underlying, collateral, strike, quantity, premium, expiry, locked collateral amount, and current state.

Physical Settlement Model

HyperQuote Options use physical settlement, meaning actual tokens change hands at expiry rather than a cash difference:

• Covered Call (ITM): The buyer delivers stablecoin equal to strike multiplied by quantity, and receives the locked underlying tokens.
• Cash-Secured Put (ITM): The buyer delivers the underlying tokens, and receives the locked stablecoin collateral.
• OTM Expiry: The seller’s collateral is returned in full. No exchange occurs.

Settlement is executed by permissionless keepers who call the settle or expirePosition functions on the OptionsEngine contract after expiry, using a price provided by the settlement oracle.

Architecture at a Glance

Taker (seller)                 Relay                  Maker (buyer)
     |                           |                         |
     |-- RFQ + EIP-191 sig ----->|                         |
     |                           |-- broadcast RFQ ------->|
     |                           |<-- EIP-712 quote -------|
     |<-- quote broadcast -------|                         |
     |                           |                         |
     |--- execute(quote, sig) --------> OptionsEngine      |
     |                                  - verify sig       |
     |                                  - mint NFT         |
     |                                  - transfer premium |
     |                                  - lock collateral  |

For a detailed walkthrough of the RFQ-to-execution flow, see Options RFQ Flow. For settlement mechanics, see Settlement & Expiry.