Smilee is an open-source protocol that enables volatility-based products and strategies. By modeling liquidity providers as options sellers, it transforms Impermanent Loss (IL) into a portfolio of options, allowing the creation of various volatility-based payoffs. As the first primitive for volatility, Smilee empowers the development of Decentralized Volatility Products (DVPs) and facilitates on-chain derivative solutions, providing opportunities for new financial instruments and hedging risks.