1/ With Cega creating the first exotic derivatives products in DeFi, we’ve seen some misinformation rooted in a lack of understanding about our product. Better educating users is one of our core values, so let’s debunk some myths 👇
cegafi.medium.com/cega-finance-u…
cegafi.medium.com/cega-finance-u…
3/ The false claims and misinformation fall under 3 main categories:
(1) Undercollateralized lending without disclosure
(2) Yields are not real
(3) TVL is not real
Detailed answers are in the medium post, but here is the tl;dr
(1) Undercollateralized lending without disclosure
(2) Yields are not real
(3) TVL is not real
Detailed answers are in the medium post, but here is the tl;dr
4/
For claims in (1), Cega vaults trade an exotic option called the “fixed coupon note”. We describe in our documentation that the product is a combination of bond + equity. That means there is a lending aspect to the product.
cega.gitbook.io/cega/products/…
For claims in (1), Cega vaults trade an exotic option called the “fixed coupon note”. We describe in our documentation that the product is a combination of bond + equity. That means there is a lending aspect to the product.
cega.gitbook.io/cega/products/…
5/ We openly address the risks in our app, docs, support guides, launch blog post, and in public panel talks. We believe Cega vaults present investors with a great opportunity to generate safer, high yields. However like any investment, investors should understand the risks.
6/
For claims in (2), all yields presented in our web app are the actual APY bid by the highest market maker in the recent weekly auction. Barriers help discount the price of an option and in a volatile environment such as this, market makers bid on these products.
For claims in (2), all yields presented in our web app are the actual APY bid by the highest market maker in the recent weekly auction. Barriers help discount the price of an option and in a volatile environment such as this, market makers bid on these products.
7/ We agree that a larger part of the 10% KI vaults have a credit element, but our APY is higher than a lending pool due to the bond + options structure (today it’s at 13.85% APY). For the 50% KI vaults where current APY is 88%+, the majority of yield is from the options payout.
8/
For claims in (3), Cega has $32M TVL. This is not fake. We have institutional depositors, including a market maker (MM). MM who deposit into Cega have their own rationale – as part of a portfolio play, to airdrop farm future Cega tokens, or they have books with diff mandates.
For claims in (3), Cega has $32M TVL. This is not fake. We have institutional depositors, including a market maker (MM). MM who deposit into Cega have their own rationale – as part of a portfolio play, to airdrop farm future Cega tokens, or they have books with diff mandates.
9/ The only way for a financial institution to win Cega’s auction is by bidding the highest APY against other market makers. Investing in a Cega vault DOES NOT guarantee or entitle that investor to winning the weekly Cega auction and receiving user funds.
10/ We are committed and focused on educating our users even more through enhancing our #option-101 materials and #research content.
11/ We are here to expand the capabilities of the DeFi ecosystem together, not to tarnish each other. If you would like to contact any Cega member, our DM is open and we are always here to listen.
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