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Circuit breaker

b1nary runs a circuit breaker that monitors ETH/USD via Chainlink every 10 seconds. If ETH moves more than 2% from a reference price:
  • GET /prices returns 503 (users can’t see quotes)
  • The protocol’s own MM nonce is incremented (quotes invalidated)
You should also implement your own circuit breaker. Call incrementMakerNonce() on BatchSettler to instantly invalidate all your outstanding quotes: 
settler.functions.incrementMakerNonce().transact({"from": YOUR_ADDRESS})

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Quote deadlines

Set short deadlines (e.g., 5 minutes). This limits the time window where a stale quote can be filled against you. 
"deadline": int(time.time()) + 300  # 5 minutes

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Max amount

Set maxAmount per quote to limit your exposure per option. Start small (1 ETH notional = 100000000 in 8 decimals) and increase as you gain confidence.

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Per-quote cancellation

Cancel specific quotes without invalidating everything: 
# On-chain: cancel by quote hash
quote_hash = settler.functions.hashQuote(quote_struct).call()
settler.functions.cancelQuote(quote_hash).transact({"from": YOUR_ADDRESS})

# Off-chain: cancel all quotes in the API
requests.delete(f"{API}/mm/quotes", headers=HEADERS)

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Settlement

Options expire weekly at 08:00 UTC. Settlement is automatic. You do not need to do anything on-chain.

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OTM (out-of-the-money)

The user’s collateral is returned. Your oTokens expire worthless. Your cost was the premium you paid. If you hedged correctly, the hedge roughly broke even.

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ITM (in-the-money)

Physical delivery occurs. The operator redeems your oTokens for the user’s collateral, swaps it via Uniswap to deliver the contra-asset.
OptionUser lockedUser receives (ITM)
PUTUSDCETH at strike price
CALLWETHUSDC at strike price
Your net P&L: premium_paid - intrinsic_value + hedge_pnl. If you hedged delta correctly, the hedge P&L offsets the intrinsic value. At expiry: close your hedge position on your external venue. The b1nary side is handled automatically.

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FAQ

No. Use any Base RPC. Public endpoints: https://mainnet.base.org (production) or https://sepolia.base.org (testnet).
Our reference MM refreshes every 60 seconds. Faster is better for tighter spreads.
Yes. A single quote can be filled across multiple executeOrder calls until maxAmount is reached.
You take directional risk. If you’re bullish ETH and selling puts, not hedging can be profitable. But you’re speculating with an edge, not market-making.
GET /prices returns 503. Users can’t fill quotes through the API. Your existing signed quotes remain valid on-chain until the deadline passes or you call incrementMakerNonce().
No. Users pay gas to execute orders. You only pay gas for: approving USDC (once), incrementing nonce (rare), and cancelling quotes on-chain (optional).
4% (400 bps) of gross premium. Deducted automatically. If you bid 5 USDC, the user receives 4.80 USDC and the protocol takes 0.20 USDC.
Yes. GET /prices shows the best bid across all MMs. If another MM bids higher, their quote is shown to users.