Cega V2 Introduces Dual Currency

Cega
6 min readNov 30, 2023

It’s a good day to be a Cega Sanic 🥚

Today we finally unveil our much-anticipated Dual Currency strategy as part of Cega V2! As the market leader in launching innovative DeFi structured investments, we’re proud to be the first to bring Dual Currency products on-chain. This new rollout comes with 5 new high-yielding investment product vaults, a sleek new interface, and enhanced security through upgraded contracts. You can make your first deposit today at app.cega.fi.

First, a refresher. Cega is the destination for decentralized structured investments, providing high fixed yields on USDC stablecoin & now alternative assets such as ETH, stETH, with more to come. Cega strategies deliver yield enhancement, principal protection and more to an investor’s diversified DeFi portfolio. To date, we’ve facilitated over $300M in trading volume, with all of Cega’s products accessible on the Ethereum and Arbitrum networks, and a selection also available on Solana.

Now let’s explore Cega’s V2 products and upgrades. 👇

What is the Dual Currency Strategy

Following the success of Cega’s Fixed Coupon Note (FCN) strategy, we recognized a gap in the market: robust yield opportunities were scarce for assets like ETH and stETH.

This strategy offers a dual benefit for investors. For cryptocurrency holders, it presents an opportunity to earn high fixed yields while minimizing potential downside, with the least favorable outcome still being a profitable exit from your position. For USDC depositors, it provides high yields and the possibility of acquiring assets at discount, the “worst case” being an accumulation of assets they already want or are confident in.

Understanding the Mechanics

The Dual Currency strategy is an exotic options strategy that generates real yield from options premiums, so no bond or lending component is present. Here’s the basic breakdown:

  1. Pick two assets you like (e.g. ETH & USDC)
  2. Choose the Cega Dual Currency product offering that pair (e.g. “ETH Dragon”)
  3. Deposit one asset (ETH) into the Cega product vault. Vaults come with a preset ‘strike price’ linked to an asset, and are locked while trading for 27 days
  4. On Day 27, receive payout in either ETH or USDC (or other assets per your currency strategy). Currency depends on if the linked asset’s market price is above or below the strike price
  5. All investors also receive a yield payment regardless of market movements. Yield paid is approx. APY ÷ 12 for a ~one-month vault regardless of whether asset prices end up or down on Day 27

The New Dual Currency Products

This foundational strategy introduces five new products. Each product is thoughtfully designed to cater to different investor holdings and risk preferences. These products also align with an investor sentiment that is generally bullish on ETH, and expects a stable/sideways market. Let’s take a look. 👀

Conversion likelihoods are based on backtesting data (Jan 2023 — Oct 2023)

1. The stETH Dragon 🐉

Deposit stETH and earn a robust 41.3% APY. This product is for you if:

  • You’re holding stETH and are looking to maximise your holdings.
  • You’re comfortable selling stETH for USDC when market conditions are favourable (+5%).

2. The stETH Elephant 🐘

Deposit stETH and earn a sustainable 22.0% APY. This product is for you if:

  • You’re holding stETH and are looking to gain additional yield.
  • You’re comfortable selling your stETH for USDC when market conditions are favourable (+10%).
  • You’d like to take a more conservative approach to the Dual Currency strategy.

3. The ETH Dragon 🐉

Deposit ETH and earn a significant 51.3% APY. This product is for you if:

  • You’re holding ETH and are looking to maximise your holdings.
  • You’re comfortable selling your ETH for USDC at a premium if the market conditions are favorable (+5%).

4. The ETH Elephant 🐘

Deposit ETH and earn a sustainable 26.9% APY. This product is for you if:

  • You’re holding ETH and are looking to gain additional yield.
  • You’re comfortable selling your ETH for USDC when market conditions are favourable (+10%).
  • You’d like to take a more conservative approach to the Dual Currency strategy.

5. The USDC Dragon 🐉

Deposit USDC and earn a high 41.3% APY. This product is for you if:

  • You’re holding USDC and looking to accumulate ETH.
  • You’re comfortable buying ETH at a 5% discount + yield when market conditions are favourable.

Secure & Audited

Security is our top priority at Cega. The smart contracts and codebase for Cega’s new products underwent a comprehensive audit by top firm Ottersec. Cega also received security consulting from Code4rena’s top auditor during live development to ensure the safety of the codebase. Zero critical vulnerabilities were identified, and all issues were patched and addressed immediately. Find the Dual Currency audit report here.

Investing in the Dual Currency Products

If you’re ready to get started, here’s a step-by-step guide:

1. Visit the Cega App: Head over to app.cega.fi.

2. Connect Your Wallet: Connect your Ethereum / Arbitrum wallet (Metamask, Rabby, Coinbase Wallet, WalletConnect).

3. Browse the ‘Dual Currency’ products: Take a look at the available products within the ‘Dual Currency’ tab.

4. Make a Deposit: Enter the amount of collateral (stETH, ETH or USDC) you wish to deposit, review the details, and confirm.

5. Sign up for Conversion Notifications: Use the form here to get email notifications when vaults have experienced a conversion.

6. Monitor Your Investment: Your investment will begin accruing yield on the Thursday following your deposit. You can monitor your yield and positions in the Portfolio tab.

7. Withdraw (Optional): You can submit withdrawal requests whenever you want. Funds are returned to your wallet when the vault expires, or reinvested if not withdrawn.

For a more details, refer to our product guides.

Depositing in the USDC Dragon vault

Potential Risks & Mitigations

Cega vault strategies are sophisticated investment products that carry risks and are not suitable for investors who do not comprehend the product or are risk averse.

Conversion Risk

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

Smart Contract Risk

Security is our #1 priority, however all on-chain protocols and transactions carry inherent smart contract risk. We conduct code audits and maintain continuous oversight to ensure user protection. Our audit reports are listed in Cega’s documentation.

Before you go 🐉🐘

We are thrilled to unveil Cega V2 and the innovative Dual Currency strategy. DeFi enthusiasts can now leverage the simple structured investment, enjoying 22%+ APY yields on ETH, stETH, and USDC. To celebrate the launch, we’ve released the Dual Currency Journey, powered by Galxe. Complete all three quests and you could win a share of $500 USDC to kickstart your next Dual Currency investment. Find more details here.

Documentation || Twitter || Discord || Medium

Use of Cega’s Portal and Services is subject to the Cega Terms of Service. Access and use of the Cega Portal and Services is subject to a range of risks, including financial risk including potential loss of funds. The Cega Portal and Services are not offered to persons or entities who are U.S. Persons, Restricted Persons, or Sanctioned Persons (as defined in the Cega Terms of Service). Access and use by such persons is expressly prohibited.

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Cega

Cega is building the next evolution in defi derivatives with the first protocol focused purely on exotic options.