Cega builds DeFi exotic options vaults that offer safer, high yield investment opportunities for investors to stake their stablecoin. Cega vaults trade exotic options strategies that earn investors yield which comes directly from options premiums paid by options buyers. Exotic options are well-established in tradfi and are a multi-trillion dollar product category. More information about Cega can be found here.
Cashmere users can securely invest their USDC into Cega vaults. Users stake their money for 30 day at a time in Cega’s vaults to earn high yield while receiving protection against severe market movements, up to a 90% price drop. This means that even if the crypto market falls by 90%, investors do not lose their initial investment and still collect high yields.
Cega’s vaults trade a type of exotic option called the “Fixed Coupon Note (FCN)” which is a structured product that has both equity option and bond-like characteristics. Investors earn high, daily yield payments on their deposited capital until the FCN expires/matures. At expiry, the initial deposit is returned to investors in full if the price of the FCN’s linked crypto assets have not fallen by a significant amount (e.g. 50% or more).
FCNs are valuable investments for investors seeking superior yields, lower risk, and who are positively or moderately bullish on the price of the underlying crypto assets.
FCNs behave like bonds because investors give capital (aka “principal”) to the note issuer who promises to pay yield (“interest”) periodically and return the initial investment when the note matures/expires. There is a periodic yield payment (“coupon”) that is a predetermined, fixed amount.
FCNs behave like equity because the value of the FCN is linked to the price performance of underlying crypto assets and when asset prices are down significantly, the principal can experience loss of value. However the FCN also includes a knock-in barrier option which protects investors’ principal from severe market downturns, up to 90% price drops.
Cashmere is a multisig wallet on Solana. You can invest in Cega using a hot wallet, but using a multisig like Cashmere provides a safer way to manage your funds. Multisig wallets can prevent attacks and exploits such as the one observed last week.
Currently, Cega access through Cashmere is available via invitation only. Grab your spots now by emailing firstname.lastname@example.org or messaging us on twitter or intercom!