New Cega Products: DAI for Dual Currency

Cega
Cega_fi
Published in
5 min readFeb 27, 2024

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Today we welcome new additions to the Cega product lineup! Introducing two new Dual Currency products utilizing MakerDAO’s stablecoin DAI — the DAI Dragon and DAI Elephant.

Following the recent launch of the Dual Currency Strategy (DCS) that are delivering some of the best yield opportunities in DeFi for ETH, stETH, WBTC & stablecoin investors, we’re expanding our product line to include DAI as a collateral option.

DAI is the third-largest stablecoin by market cap with $4.95 billion in circulation, and stands as a pioneer of decentralization. Despite its integral role in the DeFi landscape, DAI holders can struggle to find real-yield opportunities that offer high, fixed returns without the risks associated with leverage or token emissions. Cega is excited to fill a void and introduce the innovative Dual Currency strategy to DAI holders. A safer, straightforward way to earn 60.3%+ APY while providing the unique opportunity to acquire ETH at a discount and earn yield doing so. Let’s explore the benefits and potential of these new DAI-based strategies.

Dual Currency Strategy: A Refresher

The Dual Currency strategy offers a way for users to maximize the yield on their crypto assets or stablecoins (such as DAI), while seizing an opportunity to acquire assets at a discount or sell for a profit. DCS products generate your yield solely through options premiums (real yield), meaning there is no lending / bond component involved. Here’s a basic snapshot of how the products work for users:

  1. Select two assets you like (e.g. ETH & DAI).
  2. Find the Cega Dual Currency product offering that pair (e.g. “DAI Dragon”).
  3. Deposit one asset (DAI) 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 ETH or DAI (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.

New DAI Products

Today’s launch introduces the DAI Dragon & the DAI Elephant to the suite. The Dragon product adopts an aggressive strategy for higher APY, while the Elephant offers a more conservative approach while maintaining a substantial fixed yield. The likelihood of a currency conversion event is higher with the Dragon product (18%) compared to the Elephant (5%). Let’s take a look at the new Dual Currency products below.

1. DAI Dragon

Deposit DAI and earn 60.3% APY. This product is for you if:

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

2. DAI Elephant

Deposit DAI and earn 25.6% APY. This product is for you if:

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

Security and Audits

Security is #1 at Cega. Our Dual Currency products, including the new DAI range, have successfully passed a comprehensive audit by top firm Ottersec. The contracts also received expert consulting from Code4rena’s top auditor during live development. 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

Here’s a step-by-step guide if you’re ready to jump in:

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 (DAI) 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 DAI 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 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.

Before you go 👀

Cega is excited to extend the Dual Currency strategy to include DAI, marking another stride in our journey to bring Cega products to more of DeFi. This addition reflects our dedication to meeting community needs and spearheading new investment opportunities in space. In celebration of this launch, we invite our community to partake in a special Galxe quest. This event offers a chance to earn unique rewards while exploring the benefits of our DAI products. Join us and experience firsthand the new possibilities at Cega. Learn more about the event here.

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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.