💸oTOKEN in the Money

Farming oDECO should always be profitable.

oDECO call options are almost guaranteed to always be in the money because 1 DECO >= 1 MNT at all times. Since the strike price for oDECO is 1 MNT, the only time they are not in the money is when DECO's floor price = market price (1 DECO = 1 MNT). At this point the intrinsic value of oDECO would be 0, however this is an unlikely scenario because of the in built borrowing mechanism and floating LTV.

In the scenario where 1 DECO = 1 MNT, the LTV would be nearly 100%, drastically lowering the risk of purchasing DECO. As an example, say the floor price of DECO is 1 WETH/DECO and the market price is 1.05 WETH/DECO. If someone were to purchase 10 DECO they would spend around 10.5 WETH, they can immediately stake DECO for vDECO and borrow 10 WETH. So they are really only risking 0.5 ETH.

As the market price of DECO goes down, the risk and opportunity cost to buy it also decreases, allowing opportunistic participants to purchase cheap voting power, which pushes the DECO price up and moves oDECO further into the money.