Vitalik: It is worth considering and trying to build index-tracking assets based on options rather than debt

Vitalik posted on the X platform, stating that constructing index-tracking assets based on options rather than debt is worth considering and trying, using options as the foundation of DeFi instead of CDP and liquidation mechanisms. This design can avoid the extreme price volatility that causes severe and global liquidation effects, allowing exposure to the index to deviate from preferred exposure in a smoother secondary manner.

Its key advantage is that it does not require instantaneous oracles and can operate based on slow oracles, which are the types of oracles used in prediction markets. The design has a significant drawback, which is the need for regular rebalancing, and it is still necessary to clarify whether and how rebalancing can have sufficient slippage resistance. Vitalik added that compared to relying on oracles that must provide real-time answers and may be induced to give incorrect real-time answers without human remediation time, he believes that holding algorithmic stablecoins placed in such mechanisms is safer.