Ethereum (ETH) co-founder Vitalik Buterin has proposed utilizing 'options' as a new DeFi model to replace existing debt-based collateralized debt positions (CDPs) and forced liquidation systems.

Recently, Vitalik explained the background of his proposal through the Ethereum Research Forum, stating, "We could consider building the foundation of DeFi on options rather than CDPs and liquidation mechanisms." He pointed out, "In the current structure, massive liquidations occur during sharp price fluctuations, but in an options-based structure, the gap between target exposure and actual exposure can widen more gradually."

He subsequently proposed the introduction of 'delayed oracles,' similar to prediction markets, as a measure to reduce the risks of price manipulation and system malfunction. Vitalik added, "By utilizing delayed oracles, we can reduce our reliance on real-time oracles and mitigate the risks associated with price manipulation or malfunction."

Finally, he predicted that applying such a structure to the design of algorithmic stablecoins would significantly enhance stability. He emphasized, "Personally, I would feel more secure holding an algorithmic stablecoin with this structure rather than one that relies on real-time oracles."