OrBit Markets launches impermanent loss protection for DeFi market participants

OrBit Markets, an institutional liquidity provider of exotic options and structured products in digital assets, rolled out an option-based impermanent loss protection product.

The product provides full and exact protection against the volatility exposure associated with liquidity provision on certain decentralized exchanges, a risk known to DeFi users as "impermanent loss."

With the solution, a user pays an all-in fixed premium upfront and will be fully reimbursed for the actual losses at expiry. Thus, impermanent loss risks are fully transferred from the user to OrBit.

OrBit has already executed several transactions in this product linked to Bitcoin and Ethereum. It has now expanded the range of underlying tokens to include Solana, Avalanche, Polygon and Aave.

Evgeny Gokhberg, managing partner at Re7 Capital, commented on the benefit of the product. "Re7 is a fund that provides liquidity into DeFi to shape the financial ecosystem of tomorrow. As part of this strategy, hedging the Automated Market-Makers (AMM) impermanent loss is an important risk management challenge. With its [impermanent loss] protection hedge, OrBit is offering a unique and innovative product that is an excellent overlay to our investment strategy. We are looking forward to continuing to use OrBit as our counterparty for more flexible and bespoke hedging products."