I want to receive USDC or my primary network token today using my own native token
Hedgey uses a framework called conditional agreements to let holders use native tokens as collateral for upfront . Below, we explain what this means and how it works.
Conditional agreements allow anyone to generate USDC with their native tokens without selling them outright at current market prices. We do this by allowing you create agreements which lock tokens for a fixed period (defined by you,) while setting an above market price (also determined by you) that you tokens could be purchased for.
Let's look at a couple of examples.
Example 1
Example 1: Ben writes an agreement to generate $5,000 USDC with his native token.
If you pay me $5,000 USDC today, I will agree to sell you 6,000 XYZ tokens if they increase in value by 200% in the next 4 months.
For Ben, using his idle tokens to generate USDC generates enough revenue for operating costs, while avoiding market selling tokens. If Ben has additional tokens he can create additional contracts ad hoc, or create another contract in 4 months (assuming it was not activated) and generate another 5k.
When someone purchases this agreement, Ben's tokens will be locked for a maximum of four months, with a few outcomes possible.
1) The price of XYZ does not increase in value by 200% before the deadline. Ben keeps the $5,000 USDC and unlocks his 6000 XYZ tokens.
2) The price of XYZ does go beyond 200% and the contract is activated. Ben keeps his $5,000 USDC and sells his 6,000 tokens at a 200% price increase.
3) The price of XYZ does go beyond 200% and the contract is NOT activated before it expires. Ben keeps the $5,000 USDC and unlocks his 6,000 XYZ tokens. (this is rare but could occur at exactly 200% increase in price)
To make these contracts work, we take an old idea of financial options and apply it to specific DeFi needs. For this particular strategy, we use a Call Option. In the next section, we'll discuss how to create and share your own Call Option.
Last modified 2mo ago
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