Delta Neutral Indirect to Direct Crypto Exposure | DNIDCE

The DNIDCE token shows a 4D map of the ratio between capital levels maintained in indirect crypto exposure and direct exposure. The convergence of volatility can also be seen by the denser section of small asset pricing spikes. The larger spikes reflect drastic changes in ratios, however, the trend has shown growth of indirect exposure over time.

DNIDCE - Delta Neutral Indirect to Direct Crypto Exposure. Contrasts indirect crypto capital exposure while hedging volatility with a portion of direct long or short crypto exposure to create a more delta neutral and non directional dependent pairing to indirect crypto exposure.

Like the underlying market, directional bias has a correlation towards positive or negative value shifts. Positive changes in appreciation in indirect crypto exposure sectors to the hedging portion of direct exposure will result in positive asset appreciation. Negative changes or depreciation in capital with indirect exposure to crypto will lead to asset depreciation. However, some of the downside is hedged by direct crypto exposure reflections - but the ratio is dynamic and depends, in part, to the indirect exposure performance.

Mints start at 10 USD worth of ISA and will theoretically trade as a summation of the aforementioned ratio of balancing appreciations between direct and indirect crypto exposure assets. The longer a positive pricing ratio balance is sustained, the more sensitive DNIDCE becomes towards positive moves of underlying components. The shorter a positive pricing ratio is sustained - or if a negative move is made - the slower the asset appreciates or tends towards depreciation. Over time - the range will rise or fall based on sustained changes, however, the bias representation of ratios will remain consistent and seek to converge towards lower volatility trends.

Like all collateralized products on our platform, sRho is used to secure the short position. DNIDCE utilizes a 2:1 collateral ratio to secure the position. A 2.5% mint fee is required to mint DNIDCE - with the minter receiving sDNIDCE in return as a receipt.

A 2.5% fee applies to swapping sDNIDCE. sDNIDCE can be bonded and sold to the Treasury. Short-sellers will also pay interest to the pooled long sDNIDCE at a daily interest rate of 0.2% per day - which will be paid for in sRHO. This daily interest will be calculated at the time of establishing the short by entering the maximum number of days you will be short for. Once the time limit is up - the short contract will expire and the short closed. If DNIDCE is below the price when the short was initiated, the aggregated long pool of DNIDCE will pay the unit count worth of profit to the now closed short holder. The time interest the short paid to the collected pool of longs will then be distributed to the longs proportional to their positional unit count.

However, the interest will only be paid to the long holders that were in the pool at the time the short was established. If a short-seller chooses to close out their position at a loss, the collateral lost will be divided among all long sDNIDCE unit holders that were in the pool at the time the short was established. If the short-seller closes out their position at a profit, the percentage of the profit will be divided amongst all long sDNIDCE and the appropriate sDNIDCE units will be transferred to the short-seller as profit.

Shorting above the total float of DNIDCE in the lending pool is prohibited.