Introducing USDT deposits for Dual Currency

Cega
Cega_fi
Published in
6 min readDec 19, 2023

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Today we are thrilled to announce two new Cega Dual Currency products — (1) USDT Dragon and (2) USDT Elephant.

Following the launch of Cega v2 and the Dual Currency Strategy (DCS), which allowed for one of the best yields in DeFi for ETH & stETH investors, Cega is continuing to broaden its DCS product suite with a highly sought-after collateral addition: USDT.

As the third-largest cryptocurrency by market cap, USDT has established itself as the most utilized stablecoin in the market with $36B in circulation. However, despite its widespread use, USDT holders often encounter limited options for real-yield generation, especially opportunities that provide high, fixed yields without risk associated with leverage or token emissions. Cega addresses this gap by launching innovative USDT Dual Currency products to offer a simple, safer way to earn 27%+ APY. Let’s delve into what these new USDT-based strategies have to offer.

Dual Currency Strategy: A Quick Refresher

The Dual Currency strategy presents a unique opportunity for users to maximize/earn yield on their stablecoin (e.g. USDC or USDT) or alternative assets (e.g. ETH or stETH), while seizing an opportunity to acquire assets at a large discount or sell for a profit. Dual Currency products generate yield solely from options premiums (real yield) and there is no bond or lending component present. Here is the basic flow of how it works for users:

  1. Select two assets you like (e.g. USDT & ETH).
  2. Find the Cega Dual Currency product offering that pair (e.g. “USDT Elephant”).
  3. Deposit one asset (USDT) into the Cega product vault. Vaults come with a preset ‘strike price’ linked to an asset, and are locked while trading for 27 days.
  4. On Day 27, receive payout in either USDT or ETH (or other assets per your currency strategy). Currency depends on if the linked asset’s market price is above or below the strike price.
  5. All investors also receive a yield payment regardless of market movements. Yield paid is approx. APY ÷ 12 for a ~one-month vault regardless of whether asset prices end up or down on Day 27.

USDT Deposit Products

Today’s launch introduces two new USDT-based products which join the Dragon & Elephant family.

To recall, ‘Dragon’ products generate the highest yields using more aggressive strike price levels, whereas ‘Elephant’ products generate a high yield that is lower than the Dragon by using a more conservative strike level. Dragons are more likely to experience a currency conversion event than Elephants (thus explaining the animal analogy).

With this launch, we’ve also added the USDC Elephant to the Dual Currency suite, providing USDC depositors with the ability to take a more conservative approach to the strategy. Let’s take a look at the Dual Currency products below.

Conversion likelihoods are based on backtesting data (Jan 2023 — Oct 2023)

1. USDT Dragon 🐉

Deposit USDT and earn a significant 54.2% APY. This product is for you if:

  • You’re holding USDT and looking to accumulate ETH.
  • You’re comfortable buying ETH at a 5% discount + yield when market conditions are favourable.

2. USDT Elephant 🐘

Deposit USDT and earn a sustainable 27.5% APY. This product is for you if:

  • You’re holding USDT and looking to accumulate ETH.
  • You’re comfortable buying ETH at a 10% discount + yield when market conditions are favourable.
  • You’d prefer to take a more conservative approach to the Dual Currency strategy

3. USDC Elephant 🐘

Deposit USDC and earn a sustainable 27.5% APY. This product is for you if:

  • You’re holding USDC and looking to accumulate ETH.
  • You’re comfortable buying ETH at a 10% discount + yield when market conditions are favourable.
  • You’d prefer to take a more conservative approach to the Dual Currency strategy

Security and Audits

Security continues to be the top priority at Cega. The smart contracts and codebase for Cega’s Dual Currency products underwent a comprehensive audit by top firm Ottersec. They also received security consulting from Code4rena’s top auditor during live development to ensure the safety of the codebase. Zero critical vulnerabilities were identified, and all identified issues were patched and addressed immediately. Find the Dual Currency audit report here.

How to Get Started with USDT Products

If you’re ready to get started, here’s a step-by-step guide:

1. Visit the Cega App: Head over to app.cega.fi.

2. Connect Your Wallet: Connect your Ethereum / Arbitrum wallet (Metamask, Rabby, Coinbase Wallet, WalletConnect).

3. Browse the ‘Dual Currency’ products: Take a look at the available products within the ‘Dual Currency’ tab.

4. Make a Deposit: Enter the amount of collateral (USDT) you wish to deposit, review the details, and confirm.

5. Sign up for Conversion Notifications: Use the form here to get email notifications when vaults have experienced a conversion.

6. Monitor Your Investment: Your investment will begin accruing yield on the Thursday following your deposit. You can monitor your yield and positions in the Portfolio tab.

7. Withdraw (Optional): You can submit withdrawal requests whenever you want. Funds are returned to your wallet when the vault expires, or reinvested if not withdrawn.

For a more details, refer to our product guides.

Risks and Mitigations

Cega vault strategies are sophisticated investment products that carry risks and are not suitable for investors who do not comprehend the product or are risk averse.

Conversion Risk

At maturity on Day 27, investors’ deposit currency may be converted to the alternate currency at a rate lower than the market. For USDT depositors, the alternative asset (ETH) will be purchased at the preset discounted price which may be a rate less optimal than the market rate.

Smart Contract Risk

Security is our #1 priority, however all on-chain protocols and transactions carry inherent smart contract risk. We conduct code audits and maintain continuous oversight to ensure user protection. Our audit reports are listed in Cega’s documentation.

Conclusion

Cega is excited to expand the possibilities of our innovative Dual Currency strategy with the introduction of USDT deposits. This launch highlights our commitment to DeFi innovation and our dedication to responding to the needs of our passionate community. Additionally, to celebrate this milestone, we invite you to join the Galxe quest to win USDT prizes while you try out the new products. Find more details here.

’Till next time Sanics!

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Disclaimer

Use of Cega’s Portal and Services is subject to the Cega Terms of Service. Access and use of the Cega Portal and Services is subject to a range of risks, including financial risk including potential loss of funds. The Cega Portal and Services are not offered to persons or entities who are U.S. Persons, Restricted Persons, or Sanctioned Persons (as defined in the Cega Terms of Service). Access and use by such persons is expressly prohibited.

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Cega
Cega_fi

Cega is building the next evolution in defi derivatives with the first protocol focused purely on exotic options.