Published in
4 min readJan 18, 2023

A structured product is a multi-element financial instrument that allows you to flexibly adjust risk and return. How does this work? Most often through a combination of options and returns from deposits or other guaranteed sources (such as bonds).

Deltatheta, as a fully functional decentralized options protocol, allows you to implement any strategy on your platform. In addition to the flexibility of options trading, the protocol implements cross-integration with AAVE and Venus trading services. Such integration greatly simplifies the creation of the final structured product.

How to build a structured product by yourself?

It’s pretty simple.

1. Determine what is more important (profit or capital protection), and to what extent;

2. Find a source of guaranteed profitability — for example, income from liquidity in an exchange such as Uniswap or Curve, by placing a deposit in the AAVE protocol, participating in mining liquidity and so on.

The simplest structural product may look like depositing capital to a trading platform combined with the regular purchase of options for the obtained profit. Thus, in the area of trading, risk is only the future interest income. Moreover, the indexes of final profit may increase several times over due to theoretically unlimited maximal profitability.

One of the important points to take into account is the amount paid for the interaction with smart contracts and commissions when working with the protocol. An important advantage of Deltatheta is that if you keep more than 100k DLTA tokens in your wallet, all trading is commission-free. Accordingly, the total final yield of the structured product increases significantly.

The level of complexity and profitability of the structured product depends on the number of elements and their profitability. Below, we will give some possible strategies for placing liquidity and compare the profitability with and without options.

  1. Structured products where capital is placed in stable coins:

For example, placing capital in the USDC-DAI-MAI-USDT exchange pool on Balancer exchange in Polygon network at its current 8.4% YTM, or in the LUSD-USDC pool (0.05%) on Uniswap v3 at its current 12.6% YTM.

A similar size return (and even more) can be obtained by selling weekly put options on Deltatheta at an exercise price of 20%-30% above/below the market.

2. Structured products where capital is placed in volatile assets (BTC, ETH, etc.)

Option a: using lending services to take stackable coins as collateral for existing assets.

Option b: using the profitability of exchange pools, consisting of tokens and their synthetic versions (for example ETH/st (ETH on Curve), where the risk of exchange rate changes between pairs of assets is insignificant.

Option c: Sell call options

The resulting income can be fully or partially invested in the purchase of options. The simulations show that if you invest the profit received at 6% per annum in two-week options you can increase the maximum possible return up to 40% depending on the type of option.

Example of calculations as of January 12th:

Income and risks

The simulated income is as follows:

There are several things to consider when investing in a decentralized environment:

  • The security of the password and access to the wallet;
  • The security level of the smart contracts involved;
  • The cost of commissions and interactions.

Deltatheta is a decentralized platform and does not have access to your funds. The security level of the smart contracts has been verified by three audits from HACKEN (2 audits passed) and CyberUnitTech (1 audit passd). Commissions depend on the number of DLTA tokens and do not exceed 0.5% if the number of tokens over 100 000 is 0%.

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