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Options over debt: Vitalik proposes abandoning CDPs and liquidations in DeFi
Jun 1, 2026
< 1 min read
by Hannah Collymore
for CryptoPolitan
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Vitalik Buterin published a proposal on Ethereum Research and X to rebuild synthetic assets in DeFi around options contracts, replacing the debt-and-liquidation model used by algorithmic stablecoins and perpetual futures. The proposal aims to reduce liquidation and systemic risk, improve incentive alignment and derivative pricing, and could accelerate protocol updates, DEX integration and broader crypto adoption while introducing execution and integration risks for existing token models.
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Ethereum co-founder Vitalik Buterin has published a proposal on Ethereum Research and X, detailing a plan to rebuild synthetic assets in decentralized finance around options contracts. This is considered a move away from the debt-and-liquidation model that most algorithmic stablecoins and perpetual futures are being used for today. What does Vitalik’s DeFi proposal change? The...
