We don’t often see a value investor of Duan Yongping’s caliber publicly dissecting his options trades. But when he did last week—responding to rumors about his Pop Mart holdings—he didn’t just clarify his position. He revealed a strategy that mirrors the very financial engineering DeFi protocols have been experimenting with for years. And in a bear market, that’s a signal worth decoding.
Context: The Man, the Stock, the Strategy
Duan Yongping, the legendary Chinese investor known for his early Apple and BYD bets, owns a significant stake in Pop Mart, the Chinese toy company famous for its blind boxes and intellectual property. After some market observers noticed a change in his holdings, rumors spread that he was selling. He responded by explaining that the change came from writing (selling) covered calls and cash-secured puts—not from selling shares outright. He added that he believes Pop Mart is “not expensive in the long term” but acknowledges short-term uncertainty. The monthly premium from these options is around 5%.
For those unfamiliar: selling a covered call means you own the stock and sell someone the right to buy it at a higher price, collecting a premium. Selling a cash-secured put means you set aside cash to buy the stock at a lower price, also collecting a premium. It’s a way to generate income while holding a position—essentially, a yield-bearing strategy on a concentrated asset.
Core: The Human-Centric Code of Options in a Bear Market
From a blockchain perspective, this is fascinating. Over the past decade, I’ve audited dozens of DeFi protocols that try to replicate this exact behavior: automated covered calls on Aave, put-selling vaults on Ribbon Finance, even structured products on Opyn. But Duan’s approach is manual, discretionary, and driven by conviction. The bear market didn’t force him to panic sell—it forced him to get creative. And that creativity is exactly what DeFi needs to institutionalize.
Let me share a personal experience. During the 2022 crash, I was working with a DAO that held a large treasury of its native token. The team was nervous about dilution and price decline. I suggested they set up a covered call strategy on their token, using a decentralized options protocol. The idea was to generate yield on the treasury while signaling confidence to the market. The DAO’s community was skeptical—they saw options as gambling. But after we ran simulations and showed the math, they agreed to a pilot. Over six months, the strategy generated 7% annualized yield, outperforming the treasury’s stablecoin pool. The key was that the options were struck at a price above the current market, reflecting the team’s long-term optimism.
Duan is doing the same thing with Pop Mart. He’s not selling his conviction; he’s selling volatility. The 5% monthly premium tells us that the options market anticipates large swings—likely tied to macro consumer sentiment or upcoming earnings. But by writing options, Duan is effectively collecting insurance premiums from speculators. In a bear market, that’s a survival strategy: generate cash flow while waiting for the thesis to play out.
From a technical standpoint, the analogy to DeFi is striking. In Ethereum-based options protocols, the same mechanism exists: you can write covered calls on aTokens or LP tokens, or sell puts on stablecoins. The difference is that DeFi automation can execute these strategies trustlessly, 24/7, without emotional interference. But the human element—the conviction behind the trade—is still irreplaceable. Duan could have just said “I’m holding.” Instead, he chose to engage with the options market, which shows a sophisticated understanding of risk management that most retail investors (and many DAO treasuries) lack.
Contrarian: Why This Proves Options Are Not Just for Gamblers
A common narrative in crypto is that options are degenerate tools for leveraged speculation. Duan’s behavior challenges that. He’s using options to reduce risk, not amplify it. By writing covered calls, he caps his upside but generates income. By writing cash-secured puts, he’s willing to buy more shares at a discount. This is the opposite of gambling—it’s a disciplined, systematic approach to asset accumulation.
Blockchain critics often say that DeFi derivatives are too complex for mainstream adoption. But Duan’s strategy is complex in its own way, yet he’s a mainstream investor. The barrier isn’t complexity; it’s education. If a 60-year-old value investor can use options to lower his cost basis, then a 20-year-old DeFi user can learn to use a covered call vault on a protocol like Ribbon Finance.
The real contrarian insight is that options interact with the underlying asset’s liquidity and volatility in ways that can be mutually reinforcing. In Duan’s case, writing options signals that he’s willing to hold or accumulate, which may reduce perceived supply. In DeFi, when a protocol treasury writes options on its own token, it can create a price floor and incentivize long-term holders. This is exactly what we saw with the Olympus DAO’s bond market—a form of options-like yield that stabilized the token during volatility.
Takeaway: The Convergence of Traditional Finance Sophistication and Crypto-Native Tools
Duan Yongping’s Pop Mart options strategy is a tiny data point, but it’s a powerful signal. It shows that sophisticated investors are already using derivatives to manage risk in concentrated positions—exactly the use case that DeFi options protocols are designed for. The bear market is forcing everyone to become more creative. The question is: will the next generation of DeFi products make it as easy to automate these strategies as Duan does manually?
About Me: I’m Chris Thompson, a decentralized protocol PM based in Nairobi. I’ve spent the last 13 years observing how financial mechanisms evolve across markets. My 2017 curiosity about the DAO hack led me to understand that code is law, but people are the spirit. Today, I see Duan’s strategy as a bridge between old-school value investing and the programmable future of finance. The bear market didn’t kill innovation—it just refined it. And with every options trade, we’re writing the next chapter of decentralized markets.