Thetanuts Finance unveils Stronghold Vaults for crypto trading
DeFi platform Thetanuts Finance has rolled out a new trading product that offers non-inflationary return opportunities. Called “Thetanuts Stronghold index vault,” the new vehicle also provides users with risk management tools as well as improved user experience.
Thetanuts Stronghold enables traders betting on a rise or drop in implied or expected price volatility over a specific period to avoid the headaches associated with options strategies. In particular, it allows them to stake their assets directly into DeFi Option Vaults.
Sophisticated traders, who are front-running the changes in implied volatility, can benefit from customized option vault indexes created by Thetanuts researchers. These indexes provide them with organic yield generated from option selling, benchmarked against major ecosystem tokens.
Thetanuts Stronghold vaults simplify the otherwise complicated options trading for retail investors. All users need to do is to deposit their coins in the vaults, which take care of complexities like choice paralysis, liquidity lock and concentrated risk. Their staked assets are automatically deployed into specified covered selling option strategies through the use of smart contracts. The strategy is similar to running a typical position on the S&P 500 index to benefit from an expected decline in prices.
The premium collected from selling options represents the yield from the trade and is distributed among users in proportion to their deposits. In addition, once users enter a vault position on other protocols, their liquidity is collateralized and can only be withdrawn once the vault expires.
“The base yield is obtained via the payment of premiums as opposed to the inflationary token rewards seen in many other DeFi protocols. Users receive a yield-bearing token that generates superior returns by selling options across the curve, while benefiting from a diversified risk profile. The strike prices and expirations of each Stronghold strategy are algorithmically determined to generate the highest risk-adjusted yield,” the company explains.
“I am excited about Thetanuts Stronghold because it gives users great risk adjusted returns through selling diversified option selling strategies.” said Stelian Balta CEO of Hyperchain, an investor in Thetanuts. He added “great team and looking forward to Thetanuts being the future benchmark of yield generation.”
Thetanuts Stronghold offers simpler investment choices and diversification as investors can select products that accept tokens from 11 blockchains as collateral, with the aim of offering the most competitive risk-adjusted yield opportunities.
Initially launched with the USDC Stronghold index vault, the product is live now on Ethereum, Binance Smart Chain and Avalanche, with Polygon, Fantom and other chains to follow suit shortly. As the product gains traction among DeFi investors over the coming months, Thetanuts will launch other Stronghold indexes for additional major crypto assets.