Dual Currency - Frequently Asked Questions


Q: Which Dual Currency product is right for me?

Begin by taking a look at the key strategic use cases for Dual Currency products. There are many great ways to leverage this strategy for your investment goals.

Additionally, consider which crypto assets you're holding today that may be generating weak yield and compare them to the various Cega strategies. Whether it's ETH, stETH, WBTC, USDC, DAI or USDT, there are a number of yield opportunities available.

Q: Where is the yield coming from?

The Dual Currency products earn yield completely from options premiums. There is no lending or bond component in the structure (no user-deposited capital leaves the Cega smart contract). Cega Dual Currency products trade 'European Options' thus premiums are paid upfront, which also eliminates credit risk from the structure.

Q: What is the main risk when depositing crypto assets (stETH/ETH/WBTC)?

At maturity on Day 27, investors' deposit currency may be converted to the alternate currency at a rate lower than the market. For ETH/stETH/cbETH/WBTC depositors, the deposit asset will be sold for USDC at a preset profit level (5%, 10% or 30%) which may be less optimal than the market rate (diluting potential upside).

Q: What is the main risk when depositing stablecoins (USDC/USDT/DAI)?

At maturity on Day 27, investors' deposit currency may be converted to the alternate currency at a rate lower than the market. For stablecoin depositors, the alternative asset (ETH) will be purchased at the preset discounted price which may be less optimal than the market rate.

Q: What happens to my deposit if there is no conversion at the 27-day expiry mark?

If there's no conversion at the 27-day expiry, you'll receive your principal and yield back in the same asset you originally deposited.

Q: What price do I receive my assets at if the vault converts?

Users receive the converted assets at the strike price. This price is set at the beginning of the vault's tenure.

Q: In what market conditions do these products perform best?

While they can provide higher yields in volatile markets due to potentially higher APYs, these products are best suited to sideways / stable market conditions.

Q: When can I initiate a withdrawal?

Users can initiate a withdrawal at any point during the vault's tenure. However, withdrawals will only be processed at the end of the 27-day tenure.

Q: What is the minimum amount required to invest?

There is no minimum deposit amount.

Q: What is Cega v2.0?

Cega V2 brings a range of new high-yielding investment product vaults, a sleek new interface, and enhanced security through upgraded contracts. V2 is Cega's largest product update, and allows alternative asset deposits on top of a redesigned user-focussed interface that provides more information to users.

Q: How will I know if the vault has converted?

Vaults will be marked as converted in the Portfolio tab. You can also sign up for email notifications for conversions. Sign up here.

Q: Why and when is wstETH used for Cega Dual Currency products?

Wrapped staked ETH (wstETH) is a token created by Lido and is the DeFi compatible version of staked ETH (stETH). The wstETH token was created because stETH is a rebasing token, does not have a constant balance, and therefore is not supported by most DeFi applications. For more information about wstETH, please visit Lido's documentation here: link.

On Ethereum Mainnet -- all Cega stETH-named products take stETH deposit and pay-out in stETH. This increases accessibility and ease-of-use for users. Under the hood, stETH deposits are wrapped into wstETH using Lido's native smart contract. The 27 day vault strategy trades the wstETH which is why the underlying linked asset is wstETH, and why wstETH is used for final payoff calculations.

On Arbitrum -- all Cega stETH-named products take wstETH deposit and pay-out in wstETH. This is because stETH does not exist on Arbitrum. Wrapped stETH is also the underlying linked asset for payoff calculations.

Q: How does the math work for stETH and wstETH? I deposited 1 stETH but got less than 1 wstETH back.

At a high level, the wstETH and stETH contracts keep track of total supply and price, and issue accordingly. The total supply of stETH is changing at all times since it's rebasing. It tries to peg to the price of ETH, and in order to generate yield it generates more tokens. wstETH on the other hand is constant, so in order for the redemption to match the number of stETHtokens, the wstETH price is higher.

Q: When should I submit for withdraw request?

You must submit your withdrawal request prior the vault expiry date. Vaults have a 28-day lifecycle and you can see the expiry date (and when you'll receive your withdrawal) in the Portfolio page.

Q: I requested for withdrawal a few days ago but I haven't received the funds yet.

You will receive your funds once the vault expires. Vaults trade for 27-days, and you can see your vaults expiry in the portfolio page by clicking on your active investment.

Q: I requested a withdrawal just after the vault expired, when will I receive my withdrawal?

If you do not request you withdrawal before the vault expiry date, your investment will automatically be rolled over to the next vault. Your withdrawal request will be applied to the new vault, and your funds will be withdrawn at the expiry of the new vault.

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