The challenge

Telos is a high-performance, energy-efficient blockchain built for scalability, low fees, and fast transactions. Seeking to diversify its treasury management tools and enhance yield generation, Telos explored new financial instruments.

As part of this strategy, Telos partnered with Enzyme to leverage on-chain options.

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The solution

Thanks to Enzyme.Myso, Telos has been able to structure tailored covered calls, allowing them to sell an option to buy approximately 300,000 wTLOS —the wrapped version of Telos' native token, TLOS— if the strike price was reached by the option’s expiration.

With this strategy, Telos could generate immediate income through the premium earned from selling the option. Meanwhile, the underlying asset (wTLOS) is securely locked in an escrow contract for the duration of the option, ensuring:

- Telos retains ownership of the underlying asset throughout the option’s term.

- The option buyer is assured that the underlying asset will be available for purchase should they decide to exercise their option.

Thanks to Myso's flexible network compatibility, the protocol was deployed on the Telos Mainnet, enabling native covered calls execution and ultimately benefiting from Telos’ high-speed, cost-efficient network.

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The result

Telos structured its covered call strategy into three tranches:

- 200,056 wTLOS with a 30-day expiry and a 110% strike price (upside cap) — earning ~6.70% upfront premium

- 42,879 wTLOS with a 30-day expiry and a 110% strike price (upside cap) — earning ~7.18% upfront premium

- 62,063 wTLOS with a 30-day expiry and a 110% strike price (upside cap) — earning ~6.0% upfront premium

Each covered call was executed on-chain and over-the-counter (OTC). Enzyme facilitated the process by leveraging its network of institutional trading firms and market makers to ensure efficient execution.

With Enzyme.Myso, Telos successfully diversified its strategy, generating immediate yield on its assets while still retaining upside potential.

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