Vitalik proposed using options to replace liquidation mechanisms, exploring new DeFi and algorithmic stablecoin architectures.

CoinFeed reported on June 1st that Ethereum co-founder Vitalik Buterin published an article on EthResearch proposing a DeFi design based on options rather than collateralized debt positions (CDPs) and forced liquidation. This model tracks asset indices through an option structure, allowing users to avoid instant liquidation during periods of high market volatility, as is common in traditional DeFi. Instead, users deviate from their target exposure in a smoother, non-linear manner. Vitalik believes a key advantage of this approach is that it doesn't rely on real-time price oracles, but can instead operate using "slow oracles" typically used in prediction markets, thus reducing the risk of oracle manipulation.