Yes, Opium Protocol is fully decentralized.
Yes, Opium Protocol has been audited by SmartDec.
Composable Multiclass Fungible Token Standard. ERC-721o is an open source standard with ERC-721 backward compatible trading functions. More information about it you can read here.
Each derivative can charge a % fee from the profit maker (the fee is set by the derivative author and its part of derivative definition, it can also be zero) the protocol takes very small proportion from that fee that is set by the author. This is received by shareholders and supporters of the protocol (people who run automatic search and execution of expired positions, market makers and arbitragers). In reality profit maker commissions can be 0.1-0.2% in order for protocol to be business sustainable.
yes, than you get your initial collateral back, but the signal that something collapsed should come from the (decentralized) oracle.