D2 Finance: Unveiling dgnETH (DEGENETH)
Leveraging LRT Yields for upto 4x ETH Upside.
dgnETH (DEGENETH) aims to rescue Arbitrum’ salty DeFi trader (see DCFGOD tweet), who has been FOMOing for last few months watching Solana (alongside all but our D2 hunter Cyberxtrem kek), but is also tired of getting rekt in the endless search for the next big memes: despite few impressive winners, most meme coins are still plagued by rug pulls, insiders manipulations, or botted launches.
Degen investors are actively searching for opportunities to earn higher returns compared to merely holding ETH, and they’re ready to embrace significantly higher volatility to achieve this.
In contrast, our flagship product, ETH++, is designed with stability in mind, offering steady returns that are particularly appealing to institutional investors, such as family offices.
dgnETH: smart degening
DgnETH is for those who strive for a balance between risk and reward, embodying the essence of D2’s philosophy, but with a clear “risk-on” bias. This allows it to weather higher drawdowns without becoming an unbearable burden, thanks to its convex strategy.
D2’s dgnETH strategy is designed to provide an average exposure to ETH’s upside of 2X, with the potential to reach up to 4X during bullish market conditions.
Crucially, aside from the cost of options, the downside risk mirrors that of directly holding ETH. By depositing WETH and receiving WETH in return, users are shielded from the drastic risk of their investment dropping to zero — a risk commonly feared with highly volatile assets like meme coins.
Why dgnETH is a Game-Changer for degens
Higher Upside on Manias: In euphoric phases, dgnETH could yield 2X to 4X ETH upside, akin to a more lucrative lottery ticket than standard ETH holding.
ETH-like Downside Risk: The strategy incorporates ‘implied puts’ as a protective measure when exposure exceeds 100%, designed to replicate the performance of directly holding ETH, particularly in safeguarding against the drastic losses associated with a 4X leveraged position during a 25% market downturn.
It’s important to note that the chart below offers a simplified view of the strategy’s payoff and does not factor in the cost of options premiums, which can significantly exceed the returns from the yield component outlined below.
CT-free : Perhaps the most significant appeal of dgnETH is its CT-free nature, meaning there’s no need to spend your entire day on Crypto Twitter tracking numerous charlatans and automated campaigns. It offers the excitement of potential high returns, akin to holding a lottery ticket but with better odds and far less stress compared to the whirlwind of meme coin speculation.
What’s the catch? Theta!
Incorporating call options into a structured product is common in traditional finance, but optionality comes at a cost, necessitating skilled active trading to combat theta decay.
dgnETH innovatively repackages yield from LRT looping in AAVE or LRTs in Pendle to amplify its upside, a strategy demanding careful analysis of hedging positions and the PT and YT relationship — where D2’s modeling prowess shines.
Participating in the dgnETH Market
- Deposits as WETH
- Dgn capacity will typically be constrained between 10 and 20% of ++ strategies
Whitelist
- Entry into the dgnETH requires users to hold at least 1 xD2 token to get WL
- This requirement is poised to increase with each epoch, ensuring a fair and measured expansion of the product
- Additionally, D2 Finance airdropped 1 xD2 to the top 500 LRT wallets (by ETH balance) on Arbitrum, further integrating this innovative product with the core LRT community
Logistics: Lyra++ (now Derive) is already funded
Lyra++ has revolutionized options trading with strategies that optimize returns while minimizing risks across all D2 Finance vaults ETH++ in particular.
https://medium.com/@D2.Finance/d2-finance-lyra-market-launching-on-camelot-a2f4001636fe
dgnETH extends this innovation, leveraging long options for delta adjustments combined with momentum signals.
Subaccounts will receive allocations from existing Lyra++ funds, enabling us to maintain capital efficiency and strategic exposure akin to a traditional hedge fund’s operations.
How dgnETH Complements ++ Strategies
While ++ strategies cater to conservative investors, including family offices requiring robust downside protection, dgnETH targets those seeking higher risk and potential rewards.
It represents an evolution of D2’s offerings, initially slated for the v4 architecture but expedited to seize current “market mood”.
RENZOSILO++
RENZOSILO++ joins GERAPENDLE++ as a stealth vault strategy focusing on leveraging the D2 v0 architecture for immediate gains as we gear up for v3 code integration.
(Note: Direct deposits for RENZOSILO++ are not available at this time.)
D2 Finance, is a Multi-strategy Fund focusing on Tokenized DeFi Derivatives Strategies.
D2 Finance offers a robust suite of institutional-grade managed strategies within our innovative, non-custodial single-click vault architecture. Our strategies are designed to maximize returns by balancing risk and reward efficiently, drawing on our team’s deep expertise in hedge fund management and derivatives, while leveraging unique opportunities in the digital asset space.
For more details and to join this groundbreaking venture, visit our website and join our community on Discord and Twitter.
