As mentioned in the article below, TermMax uses options leverage to allow everyone to short Alpha tokens, and there is also a dual currency yield gameplay.
👉 This article: https://www.binance.com/zh-CN/square/post/32320785110297
Going long and short is relatively simple for everyone to understand, but the dual currency gameplay requires some additional explanation.
🤔 TermMax's dual currency:
0/ You can deposit coins and USDT to earn interest;
1/ Deposit: Upon maturity, if the token price > Strike price, the tokens will be sold and you will earn APR for this period (which may be less than holding the tokens), otherwise, you will earn APR and retain the tokens (price increase). The risk is that if the price increase is too large, it may be forcibly sold, potentially missing out on higher returns.
2/ Deposit USDT: After maturity, if the token price < Strike price, then you will buy the token and earn APR during this period (which may incur losses); otherwise, you will earn APR and retain USDT. The risk is that the bought token may continue to decline, leading to a reduction in principal.
In other words, dual currency can also be understood as a strategy that is both long and short while earning interest. If it's coin storage, it might not be obvious, but depositing USDT is quite different.
🤔 Taking depositing USDT as an example, for instance, choosing the $BR pool:
Then you can earn interest by depositing USDT in dual currency (APR of 134%, dynamic change), with the risk coming from the decline (current/maturity price < Strike). To hedge the risk, you can choose to short the token for hedging (consideration of funding rates and margin costs is necessary, otherwise it may erode profits).
However, the most challenging aspect lies in the fact that the APR is variable, and how to calculate the position for perfect hedging.
The unfortunate thing is that I only just realized I could play this way. The pool currently depositing USDT is already at a loss, and I hope earning points can give me a surprise~
🤔 Of course, the dual currency strategy can essentially be understood as an expectation of future price volatility:
1/ If the price change at maturity is within the expected range, you can purely earn interest;
2/ If it exceeds expectations, you can achieve the maximum expected profit in the positive direction, while in the negative direction, you need to bear losses beyond expectations.
At the same time, dual currency is not just a tool for earning interest or arbitrage, but can also serve as a way to 'buy the dip'.
For example, when the current price of a certain token is too high, and the Strike price is below the current price, depositing USDT is equivalent to placing a buy order at the target price, and you can also earn interest during the waiting period, which is particularly high.
Overall, the Alpha feature of TermMax has many application scenarios and is worth further study.
Note: The above is for information sharing only and is not investment advice. Please be sure to conduct your own research!
DeFi enthusiasts: BitHappy
