Buy Low and Sell High Examples
Last updated
Last updated
With Buy Low, users can buy WETH with USDC by choosing a Linked Price that is set below the current market price.
In this example, the current price of ETH is $3,400, and Subscribers choose to buy WETH at a linked price of $3,350. The user deposits $10,000 USDC into a Buy Low vault with an APY of 521.43%.
The following scenarios are possible:
Scenario 1: On the expiration date, if the market price is less than or equal to $3,350, he will receive WETH at the Linked Price of $3,350. In addition, he will earn rewards in WETH, bringing the total to 3.285 WETH [2.985 WETH (Principal) + 0.3 WETH (Yield)].
Scenario 2: On the expiration date, if the market price is above $3,350, he will get back his principal of $10,000 USDC. In addition, he will earn USDC reward at 521.43% APY, bringing the total to 11,000 USDC [10,000 USDC (Principal) + 1,000 USDC (Yield)].
With the Sell High, Subscribers can sell WETH for USDC by choosing a Linked Price that is set above the current market price.
In this example, the current price of WETH is $3,400, and he wants to sell at a linked price of $3,450. He deposits 10 WETH into a Sell High vault with an APY of 456.25%.
The following scenarios are possible:
Scenario 1: On the expiration date, if the market price is below $3,450, he will get back his principal of $10 WETH. In addition, he will earn WETH reward at 456.25% APY, bringing the total to 11 WETH [10 WETH (Principal) + 1 WETH (Yield)].
Scenario 2: On the expiration date, if the market price is greater than or equal to $3,450, he will receive USDC at the Linked Price of $3,450. In addition, he will earn rewards in USDC, bringing the total to 37,950 USDC [34,500 USDC (Principal) + 3,450 USDC (Yield)]
