I want to sell tokens in the future, above market price, without sending wrong signals to community
Conditional agreements allow you to create a set price that you are comfortable selling your tokens at in the future, while getting paid an additional USDC fee for selling that agreement today. This is different than what traders call limit orders because it is a) a fixed period of time defined by you, and b) the agreement itself is sell-able for additional revenue.
Example 1
Example 2
Example: Ben creates the following contract:
If you pay me $4,000 USDC today, I am willing to sell you 500 UNI tokens for $25 per token (25% increase) anytime before October 12th, 2021.
In this example, Ben is taking 500 of his UNI tokens and agreeing to lock them at max until October 12th, 2021. For doing this, he wants to be paid up front. He used the Hedgey Black Scholes Model Approximation ("HEYO Price") to come up with a fair price of $4,000 USDC.
When someone buys this agreement, Ben's tokens will be locked until one of two things happen.
A) The price of UNI never reaches $25 USDC by October 12th, 2021. (Ben gets his 500 UNI back, and of course the $4k he got up front is his the day he got it)
B) The price of UNI reaches $25 USDC (or above) and the agreement buyer activates the contract. (Ben keeps the $4k, of course, and is paid and additional $25 x 500 = $12,500 for his tokens)
C) The price of UNI reaches at or beyond $25 USDC and the agreement buyer does not execute before the October 12th, 2021 deadline. (Ben still gets to keep the $4k and gets his 500 UNI back)
Example: Jeff creates the following contract:
If you pay me $3000 USDC today, I am willing to sell you 300 UNI tokens for $75per token (300% increase) anytime before March 12th, 2022.
In this example, Jeff is taking 300 of his UNI tokens and agreeing to lock them at max until October 12th, 2021. For doing this, he wants to be paid. He used the Hedgey Black Scholes models to come up with a fair price of $3000 USDC.
When someone buys this agreement, Bens tokens will be locked until one of two things happen.
A) The price of UNI never reaches $75 USDC by October 12th, 2021. (Ben keeps the $3k and gets his 300 UNI back)
B) The price of UNI reaches at or beyond $75 USDC and the agreement buyer executes the contract. (Ben keeps the $3k and is paid $75 x 300)
C) The price of UNI reaches at or beyond $75 USDC and the agreement buyer does not execute before the October 12th, 2021 deadline. (Ben keeps the $3k and gets his 300 UNI back)
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 4mo ago
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