Buterin proposes options-built index trackers and slower oracles to prevent forced liquidations in DeFi

Ethereum co-founder Vitalik Buterin published a research post proposing index-tracking assets built from options contracts rather than the debt-based, collateralized positions that underpin much of DeFi today, arguing the approach could remove forced liquidations by settling downside risk via option payoffs ^{[1] [2]}.

The proposal recommends pairing options-based structures with slower oracles and other design choices to improve security and reduce volatility-driven liquidation spirals, with the stated goal of creating more stable, resilient DeFi products ^{[2] [3]}.

Coverage of the research emphasizes that this is a conceptual model rather than deployed infrastructure; observers note the idea could change how risk is managed in DeFi but would require further development and adoption to judge real-world effects ^{[1] [4]}.

Buterin's options-based DeFi vision reframes risk management by proposing alternatives to liquidation-heavy debt models, while remaining at the proposal and research stage ^[1].