USDe Whale
Product Details & Payoff Scenarios
Deposit USDe and earn a high fixed yield.
Strategic Use Cases
You’re holding USDe and looking to accumulate ETH
You want to earn yield in USDe
You’re comfortable buying ETH for a discount + yield when market conditions are favorable (-30%)
Note: The USDe Elephant product tracks the ETH/USDe price.
Payoff Scenarios
For each scenario below, assume the following:
$100K USDe investment in the 'USDe Elephant' Vault
USDe Elephant terms:
Investment duration: 27-day
Underlying asset = USDe
Strike price = 70%
APY = 25% (2% per 27-day vault)
ETH price on Day 1 = $1980
Scenario 1: No Currency Conversion - Deposit USDe, Receive USDe
Example Scenario: ETH price movements during 27 day period
What happens in this scenario?
TLDR: deposit USDe, receive USDe
ETH price on Day 1 is $3000 and ends on Day 27 at $2300 which is above the strike price of $2100 (70% 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 USDe). The user earns 2% yield paid in USDe (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 USDe
Deposit returned = $100K USDe
Yield earned = $2,000 USDe
APY = 25%, single 27-day vault yield = ~2%
Total payoff = $102K USDe after 27 days (deposit + yield)
Scenario 2: Currency Conversion - Deposit USDe, Receive ETH
Example Scenario: ETH price movements during 27 day period
What happens in this scenario?
TLDR: deposit USDe, receive ETH
ETH price on Day 1 is $3000, and on Day 27 ends below the strike price of $2100 (70% of Day 1 price). This results in a currency conversion.
Upon conversion, ETH is purchased at a 30% 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 32% for acquiring ETH
What is the payoff for the investor?
Initial deposit = $100,000 USDe
Deposit returned = 47.6 ETH
$100K USDe buys 47.6 ETH @$2100 (30% discount to Day 1 price)
Yield earned = 0.95 ETH
2% yield * $100K USDe deposit used to buy more ETH @$2100
Total payoff = 48.5 ETH in 27 days
Net price discount on ETH = 32%
Average ETH acquisition price = $2061 ($100K USDe ÷ 48.5 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 USDe receive USDe
ETH price on Day 1 is $3000 and on Day 10 moves below the strike price of $2100 (70% 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 $2300 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 USDe). The user earns 2% yield paid in USDe (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 USDe
Deposit returned = $100K USDe
Yield earned = $2,000 USDe
APY = 25%, single 27-day vault yield = ~2%
Total payoff = $102K USDe after 27 days (deposit + yield)
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