Why call options make sense for NFTs

Welcome! We’ve been working on something really exciting for the past six months, and we think it’s finally time that we share it with you…

What we've been building

Hook is an on-chain, NFT-native call options protocol. To simplify, it does two things:

  1. Anyone holding an NFT can write and sell covered call options, earning a premium on their holdings.
  2. Traders can buy call options to get affordable upside exposure if they want to bet on a collection increasing in value.

We do this by building an audited, insured, and open-source protocol that takes an original NFT, asks the owner for a strike price and premium, and mints a call option (itself an NFT) that can then be traded freely until the option settles at expiry. You can read more about call options in general here.

A numerical example of how a call option works

Why we believe in it

We believe a protocol like this creates a number of key benefits for the NFT ecosystem:

Call option trades stabilize NFT prices - Optioned assets are locked in Hook protocol’s vault, reducing available NFTs in the market and the amount of floor undercutting in a bear run.

Project treasuries and collectors can earn with their existing assets - Instead of letting assets sit idly in a vault, selling covered call options generate recurring premiums for the owner.

Active traders can bet on projects to appreciate in a more capital-efficient way - Call options are significantly cheaper than the underlying asset while offering similar upside exposure.

Where you can find Hook

Hook Testnet will launch this week on Ethereum Ropsten as a preview for our friends. We’d love to hear what you think as we finish putting the final touches on our Mainnet - feel free to send us feedback at founders@hook.xyz or on telegram @jakenyquist

We are actively talking to top collections and projects to provide a curated and recognizable selection of collections for Mainnet launch later this month. If you’re interested, please come and say hello in our Discord

We are always happy to engage in productive discussions, so please reach out on Twitter and Discord. You can also stay updated by joining our email list on our website

What’s next

In the coming weeks, we’ll be sharing more behind-the-scenes details ahead of our Mainnet launch. Stay tuned!