If you find this article useful and want to try out Hegic use my referral code
which will help support creating future content on other new protocols
https://www.hegic.co/?ref=0x9328c78FDa563b91b97D6B7A27D179EA7585A116
Hegic is a decentralized protocol that allows users to buy and sell options on various crypto assets, such as ETH, WBTC, and DAI. Hegic uses an automated market maker (AMM) model to provide liquidity and price discovery for options which is interesting as you can take advantage of both sides writing options via staking Hegic and entering into various options strategies that take advantage of price movements within a certain time, strategies where you can make money if the price stays within the bounds of a upper and lower price or the opposite where it doesn’t matter which way prices go as long as the move is substantial it will pay for both premiums then once that happens you have a 1/1 hedge or if you are speculating you will have a large gain.
Hegic has its own native token, called HEGIC, which is used for governance and staking. Staking HEGIC allows users to earn a share of the fees generated by the protocol. Staking HEGIC also entitles users to receive rewards in the form of rHEGIC, which is a token that represents the staked HEGIC and can be redeemed for HEGIC or other tokens in the future.
Staking HEGIC is not without risks. One of the main risks is the possibility of impermanent loss, which occurs when the price of HEGIC changes relative to the price of the underlying asset (ETH or WBTC). Additionally, staking HEGIC exposes users to the technical and security risks of the protocol, such as bugs, hacks, or exploits.
Overall HEGIC seems like a interesting protocol to benefit from both buying and selling options strategies using a unique model and will be invaluable in adding a layer of hedging, downside protection for long and short positions as well as income streams from things like iron condors that have a very high probability of making money as most of the time the markets move relatively flat over short time frames and you can use iron condors to take advantage of that and earn premiums if the price of eth or btc stays within the bounds and in order to get the best prices only enter into positions when the prices are not volatile so you have upside if volatility increases to combat the time decay and make it more profitable as well as don’t open these if you think there is a large move coming in that case a strategy that wins if prices go x in one direction or y in the other may be better so you don’t need to be right about which way the move is going just that it will be large and within the max time allowed on the platform of 90 days. Also will be looking into Ribbon finance more as I have been experimenting with there ETH and AVAX covered call strategies with a tiny bit of money to test them out and the Hegic experiment starts on the 15th when your allowed to stake Hegic for a week into the next 3 month lock up period for the options write protocol. Will be good to add additional hedging to the portfolio for btc and eth to lower the volatility of the portfolio and increase the potential upside as well by using the strategies that generate income for the portfolio in times when there is little going on as well as use those premiums to pay for the directional bull/bear spreads, directional move strategies etc to generate excess profits in times of volatility and allow for outsized gains in times of volatility as the options can be exercised anytime and buying calls when prices are tanking but starting to get less volatile and vice versa allows you to get cheaper options and bet that within x time prices will snap back which they usually do and you can then cash out the options in the money at a high apy when they snap back before continuing or staying in a range. The iron condor premiums can pay for the options and the auto exercise option will be used but only if I forget to exercise so I don’t lose money bc I have to imagine it is not as effective to use that as it is to choose when to exercise your self as the value of the options may drop due to many people auto exercising at once dropping the prices. Will also be looking at buying into an staking RBN to get protocol revenue from the options strategies which are multichain and a bit different than offered on Hegic they offer a covered call vault where you deposit say eth or avax and leave it and the strategy writes options against it and this strategy does well when prices slowly climb or stay the same and it provides a downside buffer as well in the form of the premium received.
See below for my Hegic referral link and a few other links to various other sites that one may find interesting
Hegic. I also currently own a small amount of Hegic that will be staked next epoch.
https://www.hegic.co/?ref=0x9328c78FDa563b91b97D6B7A27D179EA7585A116
MUX Perpetual Exchange Aggregator. **esMUX earned and MUX earned staking MCB as well as providing MUXLP
https://app.mux.network/#/ref/hbcdao1
AARK perpetual and rwa exchange - **AARK token airdrop for trading