What are structured products?
Structured products are packaged financial instruments that use a combination of derivatives to achieve some specific risk-return objective, such as betting on volatility, enhancing yields or principal protection.
What kind of structured products does Polysynth have?
We currently offer structured products on BTC and ETH which generate high yield through automated covered call and put strategies. For more information on the strategies used, please delve into the product cards for a detailed breakdown.
What is the risk of the covered-call strategy?
The primary risk of running a covered-call strategy is that depositors could give up upside in exchange for guaranteed yield. By selling a call option users are essentially promising to sell the asset at the strike price even if the price rises. This may result in a negative yield on the underlying asset. Please note that although a negative yield is uncommon, depositors will still be up in USD terms as the underlying asset would have appreciated significantly in a short period of time.
What is the risk of the put-selling strategy?
The primary risk for running a put-selling strategy is that the vault may incur a weekly loss if the strike price and underlying price differential end up greater than the premium received for that week.
How do I process a withdrawal?
We offer two types of withdrawals:
Instant: Only applicable to funds that are yet to be actively used in the vault. You can withdraw until Friday.
Standard: A two-step withdrawal process. At any point in time, you can submit a withdrawal to the queue and then finalise it on Friday.
Are standard withdrawals subject to profit or loss of the week?
Yes, since you are initiating a withdrawal for vault shares, those shares are subject to either the profits or losses of that week which will adjust the final withdrawable amount.
What is the fee structure?
We offer two types of withdrawals: The fee structure consists of a 2% management fee and a 10% performance fee. If the weekly strategy is profitable, the weekly performance fee is charged on the premiums earned. If the weekly strategy is unprofitable, there will be no performance fee charged. However, the management fee will always be charged irrespective of the profitability of the weekly strategy.
How can I find out the next strike in advance?
There is no way to know the strike in advance as it's calculated using last-minute data feeds.
Are the management and performance fees included in the expected APY?
Yes.
Where can I see the historical performance?
Every strategy has a card with the vault's graphical representation of historical performance.
What asset are the vault yields paid in?
Yields on every strategy is paid in the same asset you deposit. Simply put except for the covered calls in which you deposit BTC or ETH which are then settled in BTC or ETH itself, the yields for all other strategies are paid in USDC.
My options are expiring ITM, do I need to do something to exercise?
There is no further action needed on your end. Our strategies self exercise when needed.
What if I don’t withdraw at the end of the cycle?
Your deposit plus the yield earned will be rolled over into the next cycle automicatically and earn auto-compunidng returns.
Help! I am having trouble using the app.
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