Non-Traditional Hedges

Through ethere.al investors are able to mint specific hedges for real-world volatility events that are difficult to hedge using traditional financial assets such as volatility-killing option spreads or directional long/short assets. These community-driven asset classes will be minted using ISA and carry their own risks and rewards to diversify your portfolio further. Events such as political or environmental outcomes, manufacturing increases, labor force participation rates, policy shifts, and more will be able to be easily weighted into your portfolio through these measures. Each side of the outcome will be set to zero, and a predetermined time frame will be given. Not only will you be able to deposit funds into the side you pick, but you will also trade your position to the other side as the position matures and you’ve collated more data.

The rate of return will be set by the weighting of each side. Allocation divisions will start at $10 worth of ISA per unit. As a predictive skew develops, the price per unit will rise proportionally on the favored side by the difference between the positive and negative spread. For example, if 100 units believe outcome A will happen and only 50 units believe outcome B will occur, then the price per unit of A will rise by 100% to $20 worth of ISA Per unit, whereas position B will remain valued at $10 worth of ISA. This helps ensure a developed investment thesis when taking the hedge, rather than gambling on pure 50:50 odds.

Upon expiry, the positionally correct side of the trade will receive their initial investment back, along with all ISA premium from the oppositional side, minus a 10% Treasury fee to support overall platform growth.

Results will be reviewed by an independent council to ensure the validity of the results.

Future hedges will be taken into account from community inputs.