Use Cases Of DCI
Dual Currency Investment (DCI) vaults on Prodigy.Fi offer flexible options for a wide range of users, combining high-yield opportunities, market positioning, and risk management.
Whether you are an aggressive yield seeker, a passive investor, or someone looking to hedge or speculate, DCI vaults provide versatile tools to meet your goals in a secure, decentralised manner.
This section explores how different types of users can leverage DCI vaults for various use cases.
Please note: This guide is for educational purposes only and should not be considered financial advice.
1. Optimise For Yields
Optimise for yields by subscribing to vaults where the Linked Price is unlikely to be reached, securing principal plus yield.
Primary Users:
Users chasing high yields in short cycles, focusing on high-yield vaults with short expiry dates and Linked Prices near the market price.
How It Works:
Subscribe to vaults that are aligned with your market outlook.
Example: If you think ETH will remain above $4000, deposit USDC into a Buy Low vault with a 1-2 day expiry date at a Linked Price of $3950. If the market price remains above the Linked Price, you receive USDC principal plus yield.
Re-allocate your return into new short term, high yield vaults as they expire.
Benefits:
Earn consistent and attractive returns in the short run.
Yields earned even if the Linked Price isn’t hit.
Flexible approach for active traders.
2. Earn Stable, Long-Term Yields
Accumulate yields over time with longer-term vaults, prioritising capital preservation.
Primary Users:
Users seeking stable growth with minimal active management.
How It Works:
Subscribe to vaults with conservative Linked Prices.
Example: If you think ETH will remain above $4000 in the mid to long term, deposit USDC into a Buy Low vault with a 30 day expiry date at a Linked Price of $3700. If the market price remains above the Linked Price upon expiry, receive USDC principal plus yield.
Re-allocate your returns into new vaults as they expire.
Benefits:
Consistent returns with minimal effort.
Compounded yields through new vault subscriptions.
Reliable growth in volatile markets.
3. Accumulate Crypto Assets (Buy Low)
Build a position in crypto (eg; ETH) at your desired price while earning yields.
Primary Users:
Users looking to buy crypto assets (e.g., ETH) at their target price.
How it works:
Select a Buy Low vault with your target Linked Price.
Example: Deposit USDC into a Buy Low vault for ETH. If ETH reaches the Linked Price upon expiry, receive ETH plus yield; if not, keep USDC plus yield.
Continue rolling yields into new vault subscriptions until price target hits.
Benefits:
Earn yields while waiting for your target price to hit.
Build your crypto position in a capital-efficient manner.
4. Take Profit On Your Crypto Assets (Sell High)
Sell your crypto assets at your desired target price while earning yields.
Primary Users:
Users looking to sell their crypto assets (e.g., ETH) at their target price.
How It Works:
Select a Sell High vault with your target Linked Price.
Example: Deposit ETH into a Sell High vault. If ETH reaches the Linked Price upon expiry, receive USDC plus yield; if not, retain ETH plus yield.
Continue rolling yields into new vault subscriptions until price target hits.
Benefits:
Earn yields while waiting for your price target to hit.
Sell at your target price with guaranteed yield.
5. Bet On Price Movements
Capitalise on short-term price movements with high-yield vaults.
Primary Users:
Traders making short-term market predictions.
How It Works:
Choose a Buy Low or Sell High vault with short expiry dates (eg; 1-2 days), and a tight Linked Price.
Example: Deposit USDC into a Buy Low vault expecting ETH to rise, or ETH into a Sell High vault expecting a drop, and avoid getting swapped.
Benefits:
High returns from short-term bets.
Yields even if predictions are wrong.
Fast-paced for active traders.
6. Hedge Assets For Risk Management
Protect holdings from volatility with specific linked prices and expiry dates.
Primary Users:
Risk-averse users safeguarding their capital from huge market swings.
How It Works:
Create a Buy Low or Sell High vault based on your protection goals.
Example: Hold ETH and create a Buy Low vault for USDC. If the crypto asset’s price falls below the Linked Price, your crypto asset is swapped into USDC at the linked price, mitigating volatility risk.
Benefits:
Capital protection from volatile markets.
7. Amplify Returns Without Liquidation Risk
Amplify returns from market movements without the risk of liquidation through DCI.
Primary Users: Investors aiming to profit from market movements while limiting risk exposure.
How It Works:
Create a Sell High to capture profits from the price difference between the current market value and the Linked Price of ETH at the vault's expiry.
Example: Create a Sell High vault for ETH. If ETH’s price reaches or exceeds the Linked Price by the expiry date, subscribers sell their ETH to you at the Linked Price, allowing you to acquire ETH at the lower Linked Price.
Benefits:
Amplify returns from price spreads by acquiring assets at a discounted Linked Price relative to the current market price, with yields capturing the upside potential from market movements while eliminating liquidation risk.
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