USDC Mammoth
Product Details & Payoff Scenarios
Deposit USDC and earn a strong fixed yield while waiting to buy ETH at a discount.
Strategic Use Cases
You’re holding USDC and looking to accumulate ETH
You want to earn yield in USDC
You’re comfortable buying ETH for a discount + yield when market conditions are favorable (-25%)
Specifications
Deposit Asset: USDC
Conversion Asset: ETH
Underlying Asset: ETH (pricing uses ETH/USDC feed)
Strike Level: 75%
Investment Duration: 27 days
Payoff Asset Condition:
Settlement Price >= Strike Price -> receive USDC
Settlement Price < Strike Price -> receive ETH (conversion asset)
Payoff Scenarios
For each scenario below, assume the following:
$100K USDC initial investment
APY = 25% (for easy math, this is approx. 2% per vault)
ETH price on Day 1 = $3000
Strike Price = $2,250 = 75% strike level * $3000
Scenario 1: No Currency Conversion - Deposit USDC, Receive USDC
Example Scenario: ETH price movements during 27 day period
What happens in this scenario?
TLDR: deposit USDC, receive USDC
ETH price on Day 1 is $3000 and ends on Day 27 at $3020 which is above the strike price of $2250 (75% 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 ($100K USDC). The user earns 2% yield paid in USDC (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 = $100K USDC
Deposit returned = $100K USDC
Yield earned = $2,000 USDC
APY = 25%, single 27-day vault yield = ~2%
Total payoff = $102K USDC after 27 days (deposit + yield)
Scenario 2: Currency Conversion - Deposit USDC, Receive ETH
Example Scenario: ETH price movements during 27 day period
What happens in this scenario?
TLDR: deposit USDC, receive ETH
ETH price on Day 1 is $3000, and on Day 27 ends below the strike price of $2250 (75% of Day 1 price). This results in a currency conversion.
Upon conversion, ETH is purchased at a 25% discount to Day 1 prices at the strike price.
The user also earns the 2% yield which is paid in ETH, effectively increasing the net discount to 27% for acquiring ETH
What is the payoff for the investor?
Initial deposit = $100,000 USDC
Deposit returned = 44.4 ETH
$100K USDC buys 44.4 ETH @$2250 (25% discount to Day 1 price)
Yield earned = 0.89 ETH
2% yield * $100K USDC deposit used to buy more ETH @$2250
Total payoff = 45.33 ETH in 27 days
Net price discount on ETH = 27%
Average ETH acquisition price = $2205.88 ($100K USDC ÷ 45.33 ETH) vs. $3000 Day 1 price
Scenario 3: Price Moves Below Strike During Trade
Example Scenario: ETH price movements during 27 day period
What happens in this scenario?
TLDR: deposit USDC, receive USDC
ETH price on Day 1 is $3000 and on Day 14 moves below the strike price of $2250 (75% of Day 1 price). However this doesn't matter because currency conversion is only evaluated on Day 27. In this example, ETH rallies by Day 27 to end at $2290 which is above the strike price. Thus the vault trade expires and no currency conversion occurs.
The full principal that was deposited by the user is returned ($100K USDC). The user earns 2% yield paid in USDC (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 = $100K USDC
Deposit returned = $100K USDC
Yield earned = $2,000 USDC
APY = 25%, single 27-day vault yield = ~2%
Total payoff = $102K USDC after 27 days (deposit + yield)
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