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Deposits Mid-Epoch

When a user deposits mid-epoch, he/she will not be entitled to the yield generated for the current epoch but his/her deposit will become active in case the vault is exercised (similar to a market limit order).

Parameter

  1. 1.
    Initial ETH spot price= $1,200
  2. 2.
    A user deposits 1,000 USDC into the put-selling wheel vault during mid-epoch
  3. 3.
    The strike price of the put-sell option = $1,100
  4. 4.
    Weekly yield= 20%
  5. 5.
    The user does not initiate a withdrawal

Scenario 1: ETH expires at $1,150 (above strike price)

  1. 1.
    The put-sell option expires worthless
  2. 2.
    Active position= 1,000 USDC
  3. 3.
    The user does not receive weekly profit (weekly yield)
  4. 4.
    Post settlement balance = 1,000 USDC

Scenario 2: ETH expires $1,050 (below strike price)

  1. 1.
    The put-sell option is exercised
  2. 2.
    Active position= 1,000 USDC
  3. 3.
    Profit = yield per epoch = 0
  4. 4.
    Post settlement balance of the active position = 1,000 USDC / $1,100 (strike price) = 0.9091 ETH (4dp)
  5. 5.
    Total post-settlement balance = 0.9091 ETH
  6. 6.
    The wheel vault then automatically changes from put-sell to covered call-selling mode
  7. 7.
    The user would now have a 0.9091 ETH active position in the covered call wheel vault and is earning yield in the form of ETH.