Ribbon Earn is Live
Today we are super excited to announce that we have officially launched Ribbon Earn, our first principal-protected product!
Ribbon Earn is now live on Ethereum Mainnet at. We have capped the TVL at 2.5M USDC for the first epoch and the strategy will be deployed on the 2nd of September.
To start depositing, click here.
Principal Protected Strategy
Instead of trading a difficult and choppy market, Ribbon Earn lets you get exposure to weekly moves in both directions, up to a certain level. If the price level does not move, or exceeds the range in either direction, users will get back a rebate of 4% APY, as well as their principal back.
The weekly barrier options enable the vault to participate in any ETH upside up to 108% of the ETH's spot level at the start of the week (upside barrier) and any ETH downside down to 92% of ETH's spot level at the start of the week (downside barrier). However, if the price of ETH increases or decreases by more than 8% during the week, the barrier options expire worthless and the vault earns the base APY only.
The terms and specification of the product are as follows:
Deposit Currency: USDC
Lockup Period: 28 days
Option Trades: 4 (once every week)
Options Tenor: 7 days (expiry in line with Deribit)
Upside Barrier: 108%
Downside Barrier: 92%
Underlying Asset: ETH
Capital Protection: 100%
Base APY: 4%
Counterparty Selection
As a principal protected structured product, Ribbon Earn yield is coming from a combination of a lending and an option component. As such, it is crucial for us to be transparent and make sure users are informed regarding the counterparty for the loan component.
The first counterparty available is a basket of accredited market makers which have the highest credit rating based on Credora methodology. The allocation within the basket is the following:
50% of the funds are lent to Wintermute
50% of the funds are lent to Folkvang
We will add new market makers in the next few epochs to offer users the possibility to choose other counterparties.
What’s Next?
We are already working on a V2 which will include many new features such as mid-epoch deposits, the ability to express a view (neutral, bearish and bullish) while still maintaining the principal protection or the ability to deposit other collateral such as ETH or WBTC amongst many others to boost the product’s yield and improve capital efficiency.
