It is said in the documentation that " Options in FPO v1.0 are priced according to the Black-Scholes Option Pricing Model". From what I observed, ATM calls and puts on FPO are 50% more expensive than on CEX. OTM calls and puts can be 100% more expensive than on CEX.
I tried to replicate the pricing on FPO with the B-S Model. I found that BTC option pricing can be replicated with an IV of 100% ATM, while it’s 70% on CEX. In short:
|Deduced IV on FPO||ATM IV on CEX|
The documentation says “Decentralized oracles provide these crucial data feeds to the FPO v1.0 smart contracts.” Do these oracles provide the correct IV? It also describes " Moving Average IV and the IV Surface Mapping". But the resulting IV seems a little bit high.
Given the pricing, how does FPO attract serious option buyers and generate income for the pools?