Decentralized finance (DeFi) is expanding investment horizons, bringing forth structured products once reserved for traditional finance’s institutional players.
Cega, a derivatives protocol, recently revealed the Gold Rush, intertwining Ethereum’s ether (ETH) and Tether’s gold-backed XAUT as underlying assets.
This product aims to yield investors up to an 83% annualized percentage yield (APY) through staking ETH, Lido’s staked ether (stETH), wrapped bitcoin (wBTC), or stablecoin USDC.
Since its debut on March 26, the Gold Rush vault has amassed $2.74 million in crypto assets.
High Yields with Downside Protection
The allure of the Gold Rush lies in its capacity to offer investors substantial returns while safeguarding against major market downturns.
The product vends 27-day put options on ETH and XAUT, with the premium from these options disbursed as yield to investors.
This structured offering incorporates a protective mechanism shielding against a 30% decline in the underlying assets’ prices, ensuring investors receive their principal alongside accrued yield unless the asset values plummet by over 30%.
Cega’s historical analysis revealed a less than 3% likelihood of such a substantial drop occurring within the 27-day timeframe.
Bridging Traditional and Decentralized Finance
Cega’s Gold Rush marks a pivotal stride in connecting traditional finance (TradFi) with DeFi, rendering sophisticated financial tools attainable for a wider spectrum of users.
This endeavor democratizes entry to structured investments and exotic options, enabling DeFi participants to bring safe-haven assets such as gold while relishing the lucrative yields of DeFi options.
The product’s integration of multi-collateral access via smart contract enhancements additionally broadens its reach, facilitating a more extensive array of deposit assets.
