SSOV

# SSOV? What mean?

## Overview

1. What is SSOV?
2. What can I do as a staker? What is my risk? What is my potential profit?
3. What can I do as an option buyer? What are my risk and potential profit?
4. Some calculations for your entertainment.

# The Abstract

## SSOV:

• Lock your tokens in a vault for an epoch
• Choose from 3 call option strikes.
• The vault will farm rewards and automatically offer call options to buyers to boost your APR.
• The buyers may claim some of your tokens at the end of the epoch.
• Result: higher APR with higher risk.

## Stakers:

• For USD maxis — you can accrue a higher USD value compared to holding a token in your wallet, but with a maximum cap.
• For token maxis — token harvests will be boosted as long as the options you agreed to sell are not exercised. Otherwise — you need to share a portion of your tokens with the option buyers.

• Make an asymmetric bet on the price of the token in the future, with potential triple-digit returns
• Pay a premium upfront to purchase a European-type call option
• If the option is in the money at the expiry — receive profits
• Otherwise — your initial investment is lost

# What is SSOV?

## In a nutshell, SSOV works the following way:

• Lock your tokens in a vault for an epoch
• Choose from 3 call option strikes.
• The vault will farm rewards and automatically offer call options to buyers to boost your APR.
• The buyers may claim some of your tokens at the end of the epoch.
• Result: higher APR with higher risk.
• The Stakers

## What Will The Stakers Do?

1. Prior to the beginning of a new epoch, strikes are set for the month-end.
2. Users lock assets into this vault for the duration of the epoch (i.e users will only be able to withdraw/unstake at the end of each epoch) and select from a set of pre-determined fixed strikes that they would like to sell calls at.
3. When users deposit into SSOV, the contract automatically does 2 things:
• the vault will automatically write (sell) covered call options on the deposited tokens.
• it deposits the users’ tokens into a single staking pool for farming rewards

## What Will The Option Buyers Do?

• Option Buyers will be able to buy the call options during the epoch and pay premia. The premia will be paid to the SSOV stakers.
• The options will be European — which means they can be exercised only at the expiry. There are two outcomes here:

# What is in store for you as an SSOV Stakeooor?

## 📌 What can I do as a Staker? What is my risk? What is my potential profit?

###### Let’s break it down. Stakers’ PnL will come from three sources:
• Pool 3 staking rewards
• Premia collected
• Spot market movement
###### How would these impact the return?
• Pool 3 staking rewards are usually fixed, per block, so their APR depends on the TVL and the price of the reward token.
• Premia collected will depend on the activity in the vault (whether it would attract option buyers).
• Spot movement will impact the USD valuation and also determine if any options will be exercised.

## How About The Stakers That Determine PnL in USD?

• If the spot price falls significantly, your USD market value will also fall, but by less — the drop will be partially offset by the premia collected and the yield farmed.
• If the spot price falls by less than the value of premia and harvests collected — the stakers will be still up in dollar terms. This is quite interesting when you think about it — the vault will insulate you against small market drawdowns.
• If the spot price goes up but remains below the strike, the stakers will earn more than holding a token on the spot market (once again thanks to the premia and yields) — this is once again the scenario where the stakers would like to find themselves at.
• If the spot price is above the strike, your USD market value will be capped. This means the stakers will be up in USD value, but if the spot overshoots the strike by a wide margin, they may be comparatively worse than if they held spot instead.

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