Ribbon Finance Rbn Price USD

Ribbon uses financial engineering to make structured products that give a steady return on investment. Ribbon's first product is an automated options strategy that focuses on making money. The protocol also lets developers combine different DeFi derivatives to make any kind of structured product they want.

Structured products are bundled financial instruments that use a combination of derivatives to achieve a specific risk-return goal, such as betting on volatility, increasing yields, or protecting the principal.

Theta Vault is a new product that automates a strategy for getting a high yield on ETH called "covered calls." The vault uses a strategy called "covered calls" and sells out-of-the-money call options every week to make money.

The main risk of this strategy is that depositors might give up potential upside in exchange for a guaranteed return. When someone sells a call option, they promise to sell the asset at the strike price, even if it goes up (a.k.a selling early). Because of this, if the price of the asset goes up a lot in a short amount of time, depositors' ETH could have a "negative yield."

But this only happens if the exchange rate between ETH and USD goes up a lot, so depositors will still be ahead in USD terms. The vault also sells call options that are very far out of the money. This means that the options are unlikely to be used.

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