Vault Settlement

This page outlines the specifications and technical details on the settlement process.

Specification
Description
European Options
All of Thetanuts' products are European options where market makers are only able to exercise their right at expiration. 
Settlement Types
All of Thetanuts' stronghold, basic, degen and long vaults are cash-settled. Only private vaults can be either cash settled or physically settled.
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Cash settlement refers to a settlement type where actual delivery of the underlying asset is not required. 
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Physical settlement: refers to a settlement type where actual delivery of the underlying asset is required.
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Example: Settlement price at 0800 UTC for ETH is at $2,700. The strike selected for the call vault was $2,500. There was a deposit of 1 ETH. 
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In the cash settled scenario, the value of ETH will be settled such that it will have the equivalent vault of ETH at $2,500. 
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In the physical settled scenario, the ETH will be swapped for USDC or equivalents that is equivalent to $2,500.
Settlement Price
Vaults with expirations have a final settlement price at the conclusion of the Epoch upon expiration.
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This final settlement price is signed by the Protocol team, but is only valid if it is bound within a fixed percentage of the latest price feed from the Chainlink oracle.
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In the event that the protocol team does not sign off on the price, after a delay, anyone can trigger the retrieval of the first valid price after expiry from the Chainlink oracle’s on-chain price history, and the contract will use it as the settlement price.
Settlement Flow
All assets/tokens are settled through major exchanges such as Deribit Index, Binance Spot, Ftx Spot or Crypto.com Spot. Anyone can use API to obtain the settlement prices on these major exchanges. This is the leading practice amongst structured products in Crypto. 
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Specification	Description
European Options	All of Thetanuts' products are European options where market makers are only able to exercise their right at expiration.
Settlement Types	All of Thetanuts' stronghold, basic, degen and long vaults are cash-settled. Only private vaults can be either cash settled or physically settled. Cash settlement refers to a settlement type where actual delivery of the underlying asset is not required. Physical settlement: refers to a settlement type where actual delivery of the underlying asset is required. Example: Settlement price at 0800 UTC for ETH is at $2,700. The strike selected for the call vault was $2,500. There was a deposit of 1 ETH. In the cash settled scenario, the value of ETH will be settled such that it will have the equivalent vault of ETH at $2,500. In the physical settled scenario, the ETH will be swapped for USDC or equivalents that is equivalent to $2,500.
Settlement Price	Vaults with expirations have a final settlement price at the conclusion of the Epoch upon expiration. This final settlement price is signed by the Protocol team, but is only valid if it is bound within a fixed percentage of the latest price feed from the Chainlink oracle. In the event that the protocol team does not sign off on the price, after a delay, anyone can trigger the retrieval of the first valid price after expiry from the Chainlink oracle’s on-chain price history, and the contract will use it as the settlement price.
Settlement Flow	All assets/tokens are settled through major exchanges such as Deribit Index, Binance Spot, Ftx Spot or Crypto.com Spot. Anyone can use API to obtain the settlement prices on these major exchanges. This is the leading practice amongst structured products in Crypto.

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Last modified 9mo ago