ETH Whale

Product Details & Payoff Scenarios

Deposit ETH and earn a high fixed yield.

Strategic Use Cases

• You hold ETH and want to maximize yield on your holdings

• You want to earn yield in ETH

• You are comfortable selling your ETH for USDC at a profit if the market conditions are very favorable (+30%)

• You want to utilize the most conservative DCS strategy

Conversion likelihoods are based on backtesting data (Jan 2023 - Jan 2024)

Payoff Scenarios

For each scenario below, assume the following:

Investor deposits 100 ETH into the 'ETH Whale' Vault

ETH Dragon terms:

1. Investment duration: 27-day

2. Underlying asset = ETH

3. Strike price = 130%

4. APY = 25% (~2% yield per 27-day vault)

5. ETH price on Day 1 = $3200

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Scenario 1: No Currency Conversion - Deposit ETH, Receive ETH

Example scenario: ETH price movements during a 27 day period

What happens in this scenario?

• TLDR: deposit ETH, receive ETH

• ETH price on Day 1 is $3200 and ends on Day 27 at $3400 which is below the strike price of $4160 (130% of Day 1 price)

• Thus the vault trade expires and no currency conversion occurs. The full principal that was deposited by the user is returned (100 ETH). The user earns ~2% yield paid in ETH (same currency as deposit)

• Deposit and yield are automatically reinvested for compounding returns into a new 27-day vault

What is the payoff for the investor?

• Initial deposit = 100 ETH

• Deposit returned = 100 ETH

• Yield earned = 2 ETH

  • APY = 25%, single 27-day vault yield = ~2%

• Total payoff = 102 ETH after 27 days (deposit + yield)

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Scenario 2: Currency Conversion - Deposit ETH, Receive USDC

Example scenario: ETH price movements during a 27 day period

What happens in this scenario?

• TLDR: deposit ETH, receive USDC

• ETH price starts at $3200 and upon expiry ends above the strike price of $4160 (130% of Day 1 price). This results in a 'conversion'.

• A conversion occurs, whereby the deposited ETH is automatically sold for USDC at a 30% profit (at the 'strike price').

• The user also earns ~2% yield, which is paid in the same currency (USDC).

What is the payoff for the investor?

• Initial deposit = 100 ETH

  • Asset value = $320,000 @$3200 ETH price

• Deposit returned = $416,000 USDC

  • 100 ETH sold for +30% profit @$4160

• Yield earned = $8,320 USDC

  • 100 ETH * 2% yield = 2 ETH earned and sold @$4160

• Total payoff = $424,320 USDC in 27 days

Scenario 3: Price Moves Above Strike During Trade

Example scenario: ETH price movements during a 27 day period

What happens in this scenario?

• TLDR: deposit ETH, receive ETH

• ETH price starts at $3200 and moves above the strike price ($4160) on day 10. However, the price at expiry ends below the strike price.

• No conversion occurs because the payoff is calculated based on the prices at expiry of the 27-day vault.

• The full principal that was deposited by the user is returned to them (100 ETH). The user also earns ~2% yield, which is paid in the deposit currency (ETH).

• Deposit and yield are automatically reinvested for compounding returns into a new 27-day vault

What is the payoff for the investor?

• Initial deposit = 100 ETH

• Deposit returned = 100 ETH

• Yield earned = 2 ETH

  • APY = 25%, single 27-day vault yield = ~2%

• Total payoff = 102 ETH after 27 days (deposit + yield)