When are we going to have decentralized options markets?

The tech for P2P binary options has been around with Bitcoin smart contracts for years. The oracle problem remains, but there are many "good enough" solutions that would still be superior to depending on an issuer.

The combinations made possible by multisig and PSBTs are many.

You still eliminate many trusted third parties from the equation, hugely reducing counterparty risk.

Bisq already does this, blocking funds in 2-of-2 multisig (buyer and seller) combined with a dispute resolution mechanism.

For a binary option it would be easy to use this mechanism. Option buyer and seller block 0.50 each in ms 2-of-2. 2 PSBT from each is generated on option creation. Oracle reveals the correct one on expiry.

"But, but... you have to trust the oracle then!" Sure, but the oracle can be a open source algo that is easy to audit. Just a few lines of code with an IF... THEN.

It only needs to do one thing! On expiry:

IF X > Y --> publish PSBT A

IF X < Y --> publish PSBT B

"OK... but then you have to trust the price feed" Yes, but then there are already existing price feeds that people are already trusting with billions... surely until something better comes along we can trust it with thousands?

The possibilities for decentralised financial markets are endless: futures, options, sports betting, prediction markets, FX, commodities, etc...