Architecture

This track is for readers who want to verify Plume rather than trust it. Every claim here points at something you can check yourself.

Three layers, cleanly separated

Issuance. Writers lock collateral and list offers at a premium they choose. Buyers accept an offer or don't. This layer is pure peer-to-peer: Plume never sets a price, never takes a side of a trade, and never holds an opinion about what an option is worth. A quote engine (see Pricing) suggests numbers to make the experience one-click, but the suggestion is a UI convenience, not a protocol input. The contracts have no idea the quote engine exists.

Positions. Every option is a standard ERC-20 token, one per unique series (asset, strike, expiry, call-or-put). Buying mints tokens; redeeming, exercising, or being bought-to-close burns them. Because a position is just a token, it inherits everything tokens already know how to do — hold it, send it, sell it on any exchange willing to make a market in it — without Plume building any of that machinery itself.

Settlement. An independent price oracle, not Plume, is the referee. Exercise reads the current price; expiry settlement reads a specific, deterministically chosen historical price. Neither path lets Plume, or anyone operating Plume, choose or influence the number. Full mechanics in Resolution.

The design stance, stated plainly

Concretely, that means:

• No function exists that lets an admin pause, freeze, or override a settlement.
• No function exists that lets Plume set or adjust a price.
• Every dangerous action — settling a series, exercising a position — is either permissionless (anyone can trigger it) or self-serve (only the position holder can act, on their own position).
• Collateral is never pooled in a way that makes one writer's solvency depend on another writer's honesty.

What Plume deliberately doesn't do

No margin. No partial collateralization. No liquidations, because there's nothing to liquidate — a position can never owe more than what's already locked against it. No on-chain pricing engine taking the other side of trades (see Pricing for exactly where the line sits). No American-options-but-actually-European asterisk — exercise really is available any time, covered in Exercise & assignment.

Map of this track

1. The collateral invariant — the mathematical core everything else rests on.
2. Series & position tokens — how an option becomes a token, and the conservation law.
3. Exercise & assignment — exercising any time, and fair assignment without loops.
4. Resolution & settlement — what happens at expiry, and the settlement-price rule.
5. Pricing — the off-chain quote engine and the line it never crosses.
6. Fees & the PLM token — the two protocol fees, and why they never touch the invariant.
7. Trust model & security — exactly what you're trusting, and how to check it.
8. Contract reference — function by function.