Risk model

Option buyers

Max loss = premium paid. No margin calls. No liquidation. Worst case: option expires worthless and the premium remains with the vault.

Liquidity providers

LPs earn premiums and fees but back winning payouts. Utilization shows how much vault capital is reserved against open risk. Withdrawals are capped by free liquidity so the vault stays solvent.

On-chain guarantees (Phase 2)

Markets are designed fully collateralized — similar in spirit to covered-call / cash-secured put invariants. Oracle freshness and invalid-print rejection bound settlement risk. Issuer controls on stock tokens and USDG remain an external dependency.