# Initialization of new pairs and new options

Introducing new underlying assets and options to Carmine Options AMM is a community-led process. It begins with the creation of governance proposals, followed by Carmine token holders casting their votes on these proposals. If the community gives the green light, we roll out the proposal and trading (along with staking) kicks off immediately.

Now, when we're launching new options, we need to set a few parameters upfront. The strike price, maturity, and risk-free rate are all nailed down right at the start. The price of the underlying asset, on the other hand, gets pulled from an AMM/oracle source that needs to be chosen.

As for the initial volatility, that's in the hands of the token holders. They pick an initial value which gets put up for vote. If the community is onboard, trading starts with this agreed-upon volatility. But here's the cool part - as people buy and sell, this volatility figure gets updated.

One thing to note when drafting a proposal: it's smart to manually or automatically check out the initial volatility against similar options on other exchanges and protocols. Why? Because it gives us a starting point that's as efficient as possible. It's all about hitting the ground running.


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