Ten Year Leveraged Products
eTY | eITY: At inception, a base $10 price to asset ratio was established. Every mint must utilize $10 worth of ISA to mint, even if price decreases or increases - with the cost reflecting the changes to the Rate pulled from the oracle. For example, if the Rate appreciated 10% (i.e., 2.0% increasing to 2.2%), eTY 3x leveraged asset would cost $13 worth of ISA, and eITY would cost only $7 worth of ISA to mint. The inherent risk to this type of asset results from being calculated from the last price move - if the Rate were to move up 34% in a single pip, eITY3x would strike 0. The same would go for eTY3x if the Rate Lost 34% in a single pip. While it is safer than pulling from a value at the close type of oracle feed, there is a theoretical chance that either asset could strike 0. In which case, the asset that hit 0 would need to be reset to base 10.
The basic calculation for establishing the synthetic asset’s price off of the percent change pulled from the data feed:
However, to mitigate this risk, if a move is detected according to the following percentage structure, the following results would occur per leveraged value:
Through this mechanism, the likelihood of either synthetic asset reaching absolute zero is significantly reduced.
Beyond hedging your portfolio against inflation, you can fuse these assets with other tokens and sell them to the Treasury; in return, you will receive a variable bond rate for the platform token ISA. Instead of a redeem function, eTY can be swapped on the platform with a fee of 2.5%, which will return to the Treasury to collateralize ISA further. More on that shortly.