DAOs create these products and offer liquidity with no opportunity cost, so tokenholders benefit from their features.
Community managers use them to offer incentive aligned bounties to builders.
Treasury managers sell them as a way to raise money with the treasury without selling at a bad price.
DAOs can use their treasury to mint and provide liquidity for these products, with no need for another capital type.
The process to create these is permissionless and within the DAO’s control, as compared to a centralized trading platform.
Call options can be offered as incentives. They can be offered more liberally than unrestricted tokens, since they will only cost the treasury anything if the token trading is high.
Uniswap creates a put option on UNI with a $25 strike. A trader buys it for .05 UNI. At expiry, the price is $15 and the option is worth $10.
Take the above example, except the token fails to rally. The call options expire valueless, and have no cost to the UMA treasury.
For a put option, consider UNI creates a put option with a $25 strike. A trader buys it for .05 UNI. At expiry, the price is $15, and so the option is settled worth $10.