# Variance Swaps Valuation ⎊ Term

**Published:** 2026-04-15
**Author:** Greeks.live
**Categories:** Term

---

![A dark background serves as a canvas for intertwining, smooth, ribbon-like forms in varying shades of blue, green, and beige. The forms overlap, creating a sense of dynamic motion and complex structure in a three-dimensional space](https://term.greeks.live/wp-content/uploads/2025/12/intertwined-complexity-of-decentralized-autonomous-organization-derivatives-and-collateralized-debt-obligations.webp)

![The image displays a close-up of a modern, angular device with a predominant blue and cream color palette. A prominent green circular element, resembling a sophisticated sensor or lens, is set within a complex, dark-framed structure](https://term.greeks.live/wp-content/uploads/2025/12/algorithmic-sensor-for-futures-contract-risk-modeling-and-volatility-surface-analysis-in-decentralized-finance.webp)

## Essence

A **Variance Swap** functions as a forward contract on the [realized variance](https://term.greeks.live/area/realized-variance/) of an [underlying asset](https://term.greeks.live/area/underlying-asset/) price. It permits participants to gain direct exposure to volatility, decoupling this dimension of risk from the directional price movement of the underlying digital asset. The payoff at maturity equals the difference between the realized variance and the pre-agreed strike price, multiplied by a notional amount. 

> A variance swap allows traders to isolate and trade asset volatility directly by settling the difference between realized and expected variance at expiration.

The structure serves as a fundamental building block for managing portfolio risk in decentralized markets. By targeting variance, participants hedge against rapid market fluctuations or speculate on the intensity of price swings without requiring delta-hedging strategies common in standard option trading. The mechanism relies on the mathematical property that the variance of a log-normal process can be synthesized through a static portfolio of out-of-the-money vanilla options.

![The image displays an abstract, three-dimensional rendering of nested, concentric ring structures in varying shades of blue, green, and cream. The layered composition suggests a complex mechanical system or digital architecture in motion against a dark blue background](https://term.greeks.live/wp-content/uploads/2025/12/decentralized-finance-layered-architecture-highlighting-smart-contract-composability-and-risk-tranching-mechanisms.webp)

## Origin

The conceptual framework for these instruments stems from the need to simplify the complex Greeks associated with option portfolios.

Market makers traditionally faced significant challenges in managing **Vega** and **Gamma** exposure while hedging directional risk. By creating a synthetic instrument that tracks variance, the financial engineering community shifted the focus from managing individual option sensitivities to managing the aggregate volatility of the asset itself.

- **Replication Theory**: The mathematical foundation relies on the work of Carr and Madan, who demonstrated that any twice-differentiable function of a terminal price can be replicated using a continuum of European options.

- **Variance Swap Utility**: The design provides a clean, linear exposure to volatility, eliminating the need for constant rebalancing of a delta-neutral hedge.

- **Crypto Integration**: Digital asset markets adopted this structure to mitigate the extreme volatility inherent in blockchain protocols, providing institutional participants with a mechanism to hedge systemic tail risk.

This transition mirrors the evolution of interest rate swaps, where complex cash flow management became simplified through standardized derivative structures. The shift represents a move toward capital efficiency in decentralized finance, where collateral requirements and liquidation thresholds demand precise [risk management](https://term.greeks.live/area/risk-management/) tools.

![An abstract sculpture featuring four primary extensions in bright blue, light green, and cream colors, connected by a dark metallic central core. The components are sleek and polished, resembling a high-tech star shape against a dark blue background](https://term.greeks.live/wp-content/uploads/2025/12/interconnected-multi-asset-derivative-structures-highlighting-synthetic-exposure-and-decentralized-risk-management-principles.webp)

## Theory

The pricing of a **Variance Swap** rests on the relationship between the fair value of variance and the cost of a static replication portfolio. The fair [strike price](https://term.greeks.live/area/strike-price/) is determined by the integral of the prices of out-of-the-money puts and calls over the range of all possible strikes.

This process effectively converts the implied [volatility surface](https://term.greeks.live/area/volatility-surface/) into a single, tradeable number.

| Parameter | Financial Significance |
| --- | --- |
| Realized Variance | The actual squared volatility observed over the life of the contract. |
| Variance Strike | The fixed rate agreed upon at the initiation of the swap. |
| Notional Amount | The monetary value assigned to each unit of variance. |

The mathematical precision hinges on the assumption of continuous trading and the absence of jumps in the underlying price process. In [digital asset](https://term.greeks.live/area/digital-asset/) markets, where flash crashes and liquidity gaps occur, the discrete nature of price updates introduces **Discretization Bias**. This gap between the theoretical continuous model and the practical reality of blockchain settlement remains a point of intense quantitative scrutiny. 

> The fair value of a variance swap is calculated as the cost of a static portfolio of vanilla options that replicates the variance of the underlying asset.

The sensitivity of the instrument, often referred to as **Volga** and **Vanna**, dictates how the swap price responds to changes in the underlying volatility surface. While standard models assume a smooth surface, the fragmented nature of decentralized order books often leads to disjointed pricing. Participants must account for these structural anomalies to avoid systemic losses during periods of extreme market stress.

![A detailed cross-section reveals a precision mechanical system, showcasing two springs ⎊ a larger green one and a smaller blue one ⎊ connected by a metallic piston, set within a custom-fit dark casing. The green spring appears compressed against the inner chamber while the blue spring is extended from the central component](https://term.greeks.live/wp-content/uploads/2025/12/dynamic-hedging-mechanism-design-for-optimal-collateralization-in-decentralized-perpetual-swaps.webp)

## Approach

Current implementation strategies focus on the synthesis of variance through [decentralized liquidity pools](https://term.greeks.live/area/decentralized-liquidity-pools/) and automated market makers.

Instead of relying on a centralized clearinghouse, protocols utilize smart contracts to calculate the realized variance using on-chain price oracles. This approach ensures that the settlement process is trustless and transparent, though it introduces risks related to oracle manipulation and network latency.

- **Oracle Selection**: The protocol must choose a price feed that accurately captures the high-frequency movements necessary for variance calculation.

- **Margin Engines**: Collateral requirements are determined by the maximum potential loss, which, in the case of variance swaps, can be significant during black swan events.

- **Settlement Logic**: Smart contracts automatically execute the payout based on the delta between the realized variance and the strike price at the predefined expiry.

Managing these positions requires a rigorous understanding of the **Gamma** profile of the underlying options used for replication. If the protocol uses an [automated market maker](https://term.greeks.live/area/automated-market-maker/) to provide liquidity, the constant product formula introduces impermanent loss dynamics that mirror the risks found in traditional liquidity provision. The interaction between protocol-level governance and market-driven volatility remains the primary tension in current derivative designs.

![The image shows a futuristic, stylized object with a dark blue housing, internal glowing blue lines, and a light blue component loaded into a mechanism. It features prominent bright green elements on the mechanism itself and the handle, set against a dark background](https://term.greeks.live/wp-content/uploads/2025/12/automated-execution-layer-for-perpetual-swaps-and-synthetic-asset-generation-in-decentralized-finance.webp)

## Evolution

The transition from legacy financial systems to decentralized protocols has forced a redesign of how variance is measured and traded.

Early iterations relied on centralized data providers, but the current state of the industry favors decentralized, multi-source oracle networks that resist single points of failure. The shift toward **Cross-Margin** accounts and portfolio-level risk management has also allowed [variance swaps](https://term.greeks.live/area/variance-swaps/) to become more integrated into broader trading strategies.

> The evolution of variance swaps in crypto reflects a shift from centralized proxy-based models toward trustless, on-chain synthetic replication.

The market now recognizes that volatility is not a constant but a stochastic process influenced by network congestion and governance cycles. As the infrastructure matures, the introduction of **Quanto Variance Swaps** ⎊ which allow for volatility exposure in a different currency ⎊ marks the next phase of sophistication. This capability allows global participants to hedge local volatility without taking on the specific currency risk of the underlying digital asset.

The complexity of these instruments is a testament to the rapid maturation of decentralized derivative markets.

![The image displays a fluid, layered structure composed of wavy ribbons in various colors, including navy blue, light blue, bright green, and beige, against a dark background. The ribbons interlock and flow across the frame, creating a sense of dynamic motion and depth](https://term.greeks.live/wp-content/uploads/2025/12/interweaving-decentralized-finance-protocols-and-layered-derivative-contracts-in-a-volatile-crypto-market-environment.webp)

## Horizon

The future of **Variance Swaps Valuation** will likely involve the integration of machine learning models to predict volatility regimes more accurately than traditional Black-Scholes approximations. As liquidity becomes more concentrated in permissionless protocols, the ability to execute large-scale variance trades without slippage will define the next generation of institutional adoption. Systems will likely move toward more resilient, modular architectures that isolate the risk of [smart contract](https://term.greeks.live/area/smart-contract/) failure from the risk of the underlying market volatility.

| Trend | Impact on Valuation |
| --- | --- |
| On-chain Oracle Efficiency | Reduces basis risk between realized and observed variance. |
| Modular Protocol Design | Increases liquidity and reduces systemic contagion risk. |
| Cross-Chain Settlement | Expands the market to assets across different blockchain ecosystems. |

The ultimate goal remains the creation of a fully transparent and efficient volatility market that functions independently of centralized gatekeepers. This trajectory requires overcoming the current limitations of smart contract throughput and the inherent unpredictability of decentralized consensus mechanisms. The interplay between protocol-level incentives and market-driven volatility will continue to dictate the stability and growth of these essential derivative instruments. 

## Glossary

### [Decentralized Liquidity Pools](https://term.greeks.live/area/decentralized-liquidity-pools/)

Mechanism ⎊ Decentralized liquidity pools function as automated market makers that facilitate the trade of digital assets without the requirement of a traditional order book.

### [Market Maker](https://term.greeks.live/area/market-maker/)

Role ⎊ A market maker plays a critical role in financial markets by continuously quoting both bid and ask prices for a specific asset or derivative.

### [Automated Market Maker](https://term.greeks.live/area/automated-market-maker/)

Mechanism ⎊ An automated market maker utilizes deterministic algorithms to facilitate asset exchanges within decentralized finance, effectively replacing the traditional order book model.

### [Digital Asset](https://term.greeks.live/area/digital-asset/)

Asset ⎊ A digital asset, within the context of cryptocurrency, options trading, and financial derivatives, represents a tangible or intangible item existing in a digital or electronic form, possessing value and potentially tradable rights.

### [Underlying Asset](https://term.greeks.live/area/underlying-asset/)

Asset ⎊ The underlying asset, within cryptocurrency derivatives, represents the referenced instrument upon which the derivative’s value is based, extending beyond traditional equities to include digital assets like Bitcoin or Ethereum.

### [Strike Price](https://term.greeks.live/area/strike-price/)

Price ⎊ The strike price, within cryptocurrency options, represents a predetermined price at which the underlying asset can be bought or sold.

### [Risk Management](https://term.greeks.live/area/risk-management/)

Analysis ⎊ Risk management within cryptocurrency, options, and derivatives necessitates a granular assessment of exposures, moving beyond traditional volatility measures to incorporate idiosyncratic risks inherent in digital asset markets.

### [Volatility Surface](https://term.greeks.live/area/volatility-surface/)

Analysis ⎊ The volatility surface, within cryptocurrency derivatives, represents a three-dimensional depiction of implied volatility stated against strike price and time to expiration.

### [Variance Swaps](https://term.greeks.live/area/variance-swaps/)

Volatility ⎊ Variance swaps represent a forward contract on realized variance over a specified period, enabling investors to isolate and trade volatility exposure independently of directional price movements.

### [Realized Variance](https://term.greeks.live/area/realized-variance/)

Definition ⎊ Realized variance represents the historical measurement of price fluctuations for a specific financial asset over a designated observation window.

## Discover More

### [Blockchain Data Enrichment](https://term.greeks.live/term/blockchain-data-enrichment/)
![A detailed schematic representing a sophisticated data transfer mechanism between two distinct financial nodes. This system symbolizes a DeFi protocol linkage where blockchain data integrity is maintained through an oracle data feed for smart contract execution. The central glowing component illustrates the critical point of automated verification, facilitating algorithmic trading for complex instruments like perpetual swaps and financial derivatives. The precision of the connection emphasizes the deterministic nature required for secure asset linkage and cross-chain bridge operations within a decentralized environment. This represents a modern liquidity pool interface for automated trading strategies.](https://term.greeks.live/wp-content/uploads/2025/12/decentralized-oracle-data-flow-for-smart-contract-execution-and-financial-derivatives-protocol-linkage.webp)

Meaning ⎊ Blockchain Data Enrichment provides the structured intelligence necessary for accurate derivative pricing and systemic risk management in DeFi.

### [Digital Securities](https://term.greeks.live/term/digital-securities/)
![A stylized padlock illustration featuring a key inserted into its keyhole metaphorically represents private key management and access control in decentralized finance DeFi protocols. This visual concept emphasizes the critical security infrastructure required for non-custodial wallets and the execution of smart contract functions. The action signifies unlocking digital assets, highlighting both secure access and the potential vulnerability to smart contract exploits. It underscores the importance of key validation in preventing unauthorized access and maintaining the integrity of collateralized debt positions in decentralized derivatives trading.](https://term.greeks.live/wp-content/uploads/2025/12/smart-contract-security-vulnerability-and-private-key-management-for-decentralized-finance-protocols.webp)

Meaning ⎊ Digital Securities provide a programmable, transparent, and atomic settlement layer that optimizes capital efficiency in global financial markets.

### [Volatility and Liquidity](https://term.greeks.live/definition/volatility-and-liquidity/)
![An abstract visualization illustrating complex market microstructure and liquidity provision within financial derivatives markets. The deep blue, flowing contours represent the dynamic nature of a decentralized exchange's liquidity pools and order flow dynamics. The bright green section signifies a profitable algorithmic trading strategy or a vega spike emerging from the broader volatility surface. This portrays how high-frequency trading systems navigate premium erosion and impermanent loss to execute complex options spreads.](https://term.greeks.live/wp-content/uploads/2025/12/dynamic-financial-derivatives-liquidity-funnel-representing-volatility-surface-and-implied-volatility-dynamics.webp)

Meaning ⎊ Volatility is price variance while liquidity is the ease of executing trades without shifting the market price significantly.

### [Markov Processes](https://term.greeks.live/definition/markov-processes/)
![A futuristic, stylized padlock represents the collateralization mechanisms fundamental to decentralized finance protocols. The illuminated green ring signifies an active smart contract or successful cryptographic verification for options contracts. This imagery captures the secure locking of assets within a smart contract to meet margin requirements and mitigate counterparty risk in derivatives trading. It highlights the principles of asset tokenization and high-tech risk management, where access to locked liquidity is governed by complex cryptographic security protocols and decentralized autonomous organization frameworks.](https://term.greeks.live/wp-content/uploads/2025/12/advanced-collateralization-and-cryptographic-security-protocols-in-smart-contract-options-derivatives-trading.webp)

Meaning ⎊ A system where future states depend only on the present, ignoring the historical path taken to arrive there.

### [Decentralized Price Verification](https://term.greeks.live/term/decentralized-price-verification/)
![A stylized, modular geometric framework represents a complex financial derivative instrument within the decentralized finance ecosystem. This structure visualizes the interconnected components of a smart contract or an advanced hedging strategy, like a call and put options combination. The dual-segment structure reflects different collateralized debt positions or market risk layers. The visible inner mechanisms emphasize transparency and on-chain governance protocols. This design highlights the complex, algorithmic nature of market dynamics and transaction throughput in Layer 2 scaling solutions.](https://term.greeks.live/wp-content/uploads/2025/12/decentralized-finance-options-contract-framework-depicting-collateralized-debt-positions-and-market-volatility.webp)

Meaning ⎊ Decentralized Price Verification provides the cryptographic truth required for secure, automated settlement of high-leverage derivative instruments.

### [Liquidator Capital Efficiency](https://term.greeks.live/definition/liquidator-capital-efficiency/)
![A futuristic propulsion engine features light blue fan blades with neon green accents, set within a dark blue casing and supported by a white external frame. This mechanism represents the high-speed processing core of an advanced algorithmic trading system in a DeFi derivatives market. The design visualizes rapid data processing for executing options contracts and perpetual futures, ensuring deep liquidity within decentralized exchanges. The engine symbolizes the efficiency required for robust yield generation protocols, mitigating high volatility and supporting the complex tokenomics of a decentralized autonomous organization DAO.](https://term.greeks.live/wp-content/uploads/2025/12/high-efficiency-decentralized-finance-protocol-engine-driving-market-liquidity-and-algorithmic-trading-efficiency.webp)

Meaning ⎊ The measure of how effectively liquidators use their capital to manage multiple liquidation events.

### [State Validity Assurance](https://term.greeks.live/term/state-validity-assurance/)
![A detailed cross-section illustrates the internal mechanics of a high-precision connector, symbolizing a decentralized protocol's core architecture. The separating components expose a central spring mechanism, which metaphorically represents the elasticity of liquidity provision in automated market makers and the dynamic nature of collateralization ratios. This high-tech assembly visually abstracts the process of smart contract execution and cross-chain interoperability, specifically the precise mechanism for conducting atomic swaps and ensuring secure token bridging across Layer 1 protocols. The internal green structures suggest robust security and data integrity.](https://term.greeks.live/wp-content/uploads/2025/12/decentralized-protocol-interoperability-architecture-facilitating-cross-chain-atomic-swaps-between-distinct-layer-1-ecosystems.webp)

Meaning ⎊ State Validity Assurance provides the cryptographic certainty required to maintain accurate, trustless settlement for decentralized derivative markets.

### [Market Clearing Mechanisms](https://term.greeks.live/term/market-clearing-mechanisms/)
![A complex mechanical joint illustrates a cross-chain liquidity protocol where four dark shafts representing different assets converge. The central beige rod signifies the core smart contract logic driving the system. Teal gears symbolize the Automated Market Maker execution engine, facilitating capital efficiency and yield generation. This interconnected mechanism represents the composability of financial primitives, essential for advanced derivative strategies and managing collateralization risk within a robust decentralized ecosystem. The precision of the joint emphasizes the requirement for accurate oracle networks to ensure protocol stability.](https://term.greeks.live/wp-content/uploads/2025/12/decentralized-finance-composability-and-multi-asset-yield-generation-protocol-universal-joint-dynamics.webp)

Meaning ⎊ Market clearing mechanisms provide the algorithmic infrastructure for price discovery and secure contract settlement in decentralized financial markets.

### [Volatility Spike Response](https://term.greeks.live/term/volatility-spike-response/)
![A stylized, futuristic financial derivative instrument resembling a high-speed projectile illustrates a structured product’s architecture, specifically a knock-in option within a collateralized position. The white point represents the strike price barrier, while the main body signifies the underlying asset’s futures contracts and associated hedging strategies. The green component represents potential yield and liquidity provision, capturing the dynamic payout profiles and basis risk inherent in algorithmic trading systems and structured products. This visual metaphor highlights the need for precise collateral management in volatile market conditions.](https://term.greeks.live/wp-content/uploads/2025/12/algorithmic-volatility-arbitrage-mechanism-for-futures-contracts-and-high-frequency-execution-on-decentralized-exchanges.webp)

Meaning ⎊ Volatility Spike Response mitigates systemic feedback loops in crypto derivatives by dynamically adjusting margin and liquidity during extreme volatility.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://term.greeks.live/"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Term",
            "item": "https://term.greeks.live/term/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "Variance Swaps Valuation",
            "item": "https://term.greeks.live/term/variance-swaps-valuation/"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://term.greeks.live/term/variance-swaps-valuation/"
    },
    "headline": "Variance Swaps Valuation ⎊ Term",
    "description": "Meaning ⎊ Variance swaps enable the direct, delta-neutral trading of asset volatility by settling the difference between realized and expected variance. ⎊ Term",
    "url": "https://term.greeks.live/term/variance-swaps-valuation/",
    "author": {
        "@type": "Person",
        "name": "Greeks.live",
        "url": "https://term.greeks.live/author/greeks-live/"
    },
    "datePublished": "2026-04-15T03:02:16+00:00",
    "dateModified": "2026-04-15T03:02:37+00:00",
    "publisher": {
        "@type": "Organization",
        "name": "Greeks.live"
    },
    "articleSection": [
        "Term"
    ],
    "image": {
        "@type": "ImageObject",
        "url": "https://term.greeks.live/wp-content/uploads/2025/12/dynamic-liquidity-vortex-simulation-illustrating-collateralized-debt-position-convergence-and-perpetual-swaps-market-flow.jpg",
        "caption": "A close-up view shows a dynamic vortex structure with a bright green sphere at its core, surrounded by flowing layers of teal, cream, and dark blue. The composition suggests a complex, converging system, where multiple pathways spiral towards a single central point."
    }
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "WebPage",
    "@id": "https://term.greeks.live/term/variance-swaps-valuation/",
    "mentions": [
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/realized-variance/",
            "name": "Realized Variance",
            "url": "https://term.greeks.live/area/realized-variance/",
            "description": "Definition ⎊ Realized variance represents the historical measurement of price fluctuations for a specific financial asset over a designated observation window."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/underlying-asset/",
            "name": "Underlying Asset",
            "url": "https://term.greeks.live/area/underlying-asset/",
            "description": "Asset ⎊ The underlying asset, within cryptocurrency derivatives, represents the referenced instrument upon which the derivative’s value is based, extending beyond traditional equities to include digital assets like Bitcoin or Ethereum."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/risk-management/",
            "name": "Risk Management",
            "url": "https://term.greeks.live/area/risk-management/",
            "description": "Analysis ⎊ Risk management within cryptocurrency, options, and derivatives necessitates a granular assessment of exposures, moving beyond traditional volatility measures to incorporate idiosyncratic risks inherent in digital asset markets."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/strike-price/",
            "name": "Strike Price",
            "url": "https://term.greeks.live/area/strike-price/",
            "description": "Price ⎊ The strike price, within cryptocurrency options, represents a predetermined price at which the underlying asset can be bought or sold."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/volatility-surface/",
            "name": "Volatility Surface",
            "url": "https://term.greeks.live/area/volatility-surface/",
            "description": "Analysis ⎊ The volatility surface, within cryptocurrency derivatives, represents a three-dimensional depiction of implied volatility stated against strike price and time to expiration."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/digital-asset/",
            "name": "Digital Asset",
            "url": "https://term.greeks.live/area/digital-asset/",
            "description": "Asset ⎊ A digital asset, within the context of cryptocurrency, options trading, and financial derivatives, represents a tangible or intangible item existing in a digital or electronic form, possessing value and potentially tradable rights."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/decentralized-liquidity-pools/",
            "name": "Decentralized Liquidity Pools",
            "url": "https://term.greeks.live/area/decentralized-liquidity-pools/",
            "description": "Mechanism ⎊ Decentralized liquidity pools function as automated market makers that facilitate the trade of digital assets without the requirement of a traditional order book."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/automated-market-maker/",
            "name": "Automated Market Maker",
            "url": "https://term.greeks.live/area/automated-market-maker/",
            "description": "Mechanism ⎊ An automated market maker utilizes deterministic algorithms to facilitate asset exchanges within decentralized finance, effectively replacing the traditional order book model."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/variance-swaps/",
            "name": "Variance Swaps",
            "url": "https://term.greeks.live/area/variance-swaps/",
            "description": "Volatility ⎊ Variance swaps represent a forward contract on realized variance over a specified period, enabling investors to isolate and trade volatility exposure independently of directional price movements."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/smart-contract/",
            "name": "Smart Contract",
            "url": "https://term.greeks.live/area/smart-contract/",
            "description": "Function ⎊ A smart contract is a self-executing agreement where the terms between parties are directly written into lines of code, stored and run on a blockchain."
        },
        {
            "@type": "DefinedTerm",
            "@id": "https://term.greeks.live/area/market-maker/",
            "name": "Market Maker",
            "url": "https://term.greeks.live/area/market-maker/",
            "description": "Role ⎊ A market maker plays a critical role in financial markets by continuously quoting both bid and ask prices for a specific asset or derivative."
        }
    ]
}
```


---

**Original URL:** https://term.greeks.live/term/variance-swaps-valuation/