Divergence is a decentralized platform focused on hedging and trading the volatility of DeFi-native assets, and its main product is an AMM-based marketplace. Divergence is building a set of decentralized volatility derivatives and volatility index offerings, aiming to become the primary platform for: 

Users who want to hedge volatility risk and prefer lower risk exposure Users who want to trade volatility and take on leveraged exposure  Users who are neutral to risk and want to act as liquidity providers to earn fees.

The volatility-derivatives catalog outlined in the Divergence roadmap includes instruments such as binary options, index derivatives, and yield vaults that use volatility trading strategies. The initial goal is to launch a product that is simple to use and can scale right away, directly addressing the requirements of liquidity providers and traders in the DeFi ecosystem: an AMM-based marketplace that trades synthetic derivative tokens with a binary pay-off structure tied to the volatility of any asset class defined by LPs (i.e., binary options).

Key design features for this AMM marketplace include:

Composability: Create markets at strike prices and expiration schedules of your choosing, using any fungible token-including DeFi assets from other protocols-through a single-step seeding and minting flow. This means you don’t have to mint a derivative token first, then separately fund a poolCapital Efficiency: Writing a binary call and a binary put for a pool uses only one collateral asset, without requiring over-collateralization. After a pool is launched, the same collateral is used when traders purchase and sell options through that pool. At any point in time, only one collateral type is associated with each pool. The smart contract holds reserve values for the maximum collateral claims, giving LPs the option to withdraw funds before expiryContinuity: By default, the binary option pools automatically exercise and roll over liquidity at expiration with the same terms. This reduces the need for LPs to move capital to set up new pools just to handle different option expiry cycles.