New Cega Products: WBTC for Dual Currency

Cega
5 min readJan 31, 2024

Today, we’re excited to unveil two new additions to Cega’s Dual Currency product suite — (1) WBTC Dragon and (2) WBTC Elephant.

Following the recent launch of the Dual Currency Strategy (DCS) that delivered some of the best yields in DeFi for ETH & stETH investors, we’re expanding our product line to include WBTC as a collateral option.

With a market capitalization exceeding $7B, WBTC is a major player in the crypto ecosystem. The recent approval of the Bitcoin ETF has further legitimized the asset and spurred a significant influx of capital. Effectively serving as a bridge between the Bitcoin and Ethereum ecosystems, WBTC has become increasingly important. Despite its prominence, holders face limited avenues for generating substantial, risk-adjusted yields. To address this gap, Cega introduces the innovative WBTC Dual Currency products, providing a straightforward, safer way to earn competitive APYs. Let’s explore what these new WBTC strategies involve.

Dual Currency Strategy: A Quick Overview

The Dual Currency strategy presents a unique opportunity for users to maximize/earn yield on their crypto assets (e.g. WBTC) or stablecoins, while seizing an opportunity to acquire assets at a discount or sell for a profit. Dual Currency products also generate yield solely from options premiums (real yield) and there is no bond or lending component present. Here is the basic flow of how it works for users:

  1. Select two assets you like (e.g. WBTC & USDC).
  2. Find the Cega Dual Currency product offering that pair (e.g. “WBTC Dragon”).
  3. Deposit one asset (WBTC) 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 WBTC 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.

New WBTC Products

Today’s launch introduces two new WBTC products for Cega users to earn real-yield with either an aggressive or conservative approach to the strategy. The WBTC Dragon product takes a more aggressive position and generates a higher APY as a result. The WBTC Elephant product takes a more conservative approach, also generating a high-fixed yield for investors. Dragon products are more likely to experience a currency conversion event than Elephant products. Let’s take a look at the new Dual Currency products below.

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

1. WBTC Dragon

Deposit WBTC and earn a robust 45.5% APY. This product is for you if:

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

2. WBTC Elephant

Deposit WBTC and earn a robust 23.1% APY. This product is for you if:

  • You’re holding WBTC and are looking to maximize your holdings.
  • You’re comfortable selling WBTC for USDC when market conditions are favorable (+10%).
  • You’d prefer to take a more conservative approach to the Dual Currency strategy using your WBTC.

Security and Audits

Security continues to be the top priority at Cega. The smart contracts and codebase for Cega’s Dual Currency products underwent a comprehensive audit by top firm Ottersec. They 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 identified issues were patched and addressed immediately. Find the Dual Currency audit report here.

How to Get Started with WBTC Products

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

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

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

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

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

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

6️⃣ 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.

7️⃣ 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.

Risks and 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 WBTC depositors, the deposit asset will be sold for USDC at a preset profit level (+5% / +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 👀

Cega is thrilled to broaden the scope of the Dual Currency strategy with the exciting addition of WBTC deposits. This new launch underscores our ongoing commitment to pioneering in the DeFi space and catering to the evolving needs of our community. We’re not just introducing new products; we’re creating opportunities for enhanced investment flexibility and higher yield potential.

To mark this significant advancement, we’re rolling out a special event for our community members. Join us in the Galxe quest where you can earn exclusive rewards and experience the potential of our WBTC products firsthand. Discover more about this event here.

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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.