Introducing Cega, The Decentralized Exotic Derivatives Protocol

Cega’s First Exotic Product: Fixed Coupon Note (FCN)

Product Structure

  • 2 or 3 Short Puts to generate yield for investors
  • 1 Long Call to incentivize Knock-Out events
  • Knock-In (KI) Barrier to provide downside protection against market downturns
  • Knock-Out (KO) Barrier to improve investor liquidity and increase compounding of yield when markets rally
Cega FCN Payoff Diagram (updated Oct 2022)
  • Superior Yield, Fixed — Users will be paid a high fixed daily yield (~40% to 200%+ APY) that is promised upfront when they stake their capital
  • Downside Protection — Users are safer investing in FCNs than in basic options strategies because FCNs provide protection against market downturns. Unless one of the crypto assets underlying the fixed coupon note falls more than 50% and knocks in, the capital staked by users stays safe
  • Compounded Returns — At the end of the term of the note (e.g. 3 months) or when the structure knocks out, the initial capital staked + yield accrued will be reinvested into a new another structure, thus compounding returns
  • Discounted Hedge — KI Barriers allow for discounted protection of a basket of underlying cryptos in a market markers portfolio
  • Proprietary Gains — Hedging these structures will allow for proprietary gains due to the delta and vega positions
  • Vote on future product offerings — we want the $CEGA token holders to influence the baskets that we create, as well as the risk tolerance
  • Impact on the statistical models — we want the community to learn about more exotic derivatives and influence the pricing capabilities that Cega offers
  • Education — we want the defi community to understand options trading in the most realistic way. Cega’s early community will consist of experts and fans of the defi derivatives field, and we look to onboard users further into understanding ways to flexibly represent views of the market using derivative instruments

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Cega

Cega

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