☄️⚡

In the Tranches @WaymontCo @RoycoProtocol

[☄️⚡ @CometShock]

lending USDC:
- exposed the collateral's long-tail risk
- receive a sliver of interest over time

Senior tranche:
- exposed to asset's long-tail risk
- earn a % of the upside as it happens

the choice is yours, anon

[☄️⚡ @CometShock]

ways, depending on how someone wants to express it:

- overweight the short, use Senior-apyUSD as the hedge
- overweight the Senior-apyUSD to speculate on recovery, use the short as a hedge if Senior's coverage is depleting
- some other straddle-like expression

note these aren't identical assets, so trivially it's not a perfect hedge nor risk-free.

For example while a @roycoprotocol market is in observation period, withdrawals are temporarily suspended for Seniors.

[☄️⚡ @CometShock]

Interesting structured hedge someone came up with in conversation:

1. buy secondary mkt apyUSD at discount
2. deposit in @roycoprotocol apyUSD Senior Tranche (up to capacity)
3. short STRC via TradFi (if you have access to do so)

It could be tailored in a few different...

[☄️⚡ @CometShock]

The onchain STRC ecosystem is searching for paths to derisk, and secondary markets are discounting prices across the board.

I've dug up a few different onchain short / hedging paths, some might even be useful in combination:

[☄️⚡ @CometShock]

Be mindful that none of these paths are perfect derisking, rather hedging exposure that still requires monitoring. Make sure you fully understand the mechanics for any of these paths, including pricing and liquidity constraints. (this content isn't financial advice, just observations.)

If I see additional paths later I may add to this thread.

[☄️⚡ @CometShock]

The onchain STRC ecosystem is searching for paths to derisk, and secondary markets are discounting prices across the board.

I've dug up a few different onchain short / hedging paths, some might even be useful in combination:

[☄️⚡ @CometShock]

There's also a @Morpho market with some sUSDat loan liquidity as well:
(keep in mind oracle structure)

[☄️⚡ @CometShock]

Regardless of what you think about the STRC-related market, it's a cleverly structured trade! They were able to execute because:
- the apyUSD Senior Tranche still has >4.8M apyUSD capacity
- the Chainlink apxUSD/USD oracle isn't below $1, so the observation period hasn't activated

[☄️⚡ @CometShock]

Spotted a novel covered+looped apyUSD repeg trade. Someone is:
1. buying discounted apyUSD
2. depositing in the @roycoprotocol apyUSD Senior Tranche, 15% minimum coverage
3. using ST-apyUSD to borrow apxUSD
4. buying more discount apyUSD
5. repeat

Even more interesting: apxUSD would actually lose value faster than ST-apyUSD, so it's incredibly resilient in LTV.

Senior Tranche: https://t.co/VUOIXI0fLE
wallet: https://t.co/s0rEDrMcnf
morpho market: https://t.co/XlLT0uog3C

[☄️⚡ @CometShock]

🟢 the market Maker has entered the building 🟢

[Grove Finance @grovedotfinance]

RWAs are about to have their stablecoin moment.

Introducing Grove Basin: programmable credit infrastructure enabling eligible tokenholders instant stablecoin liquidity for approved exits from tokenized offchain assets.

Up to $1 bn in committed daily liquidity.

Tap in 🚰

[☄️⚡ @CometShock]

@0x_Osprey @arcprize Sounds like a reverse captcha… If you solve quickly and correctly, you’re likely a bot. Blocked.

[☄️⚡ @CometShock]

Royco Dawn only just launched public access. It represents the beginning of the onchain risk tranching era.

Royco Dusk is the composable endgame. And it's taking a lot of restraint to not share more right now.

[Shiv @ShivaanshKapoor]

DeFi's composability is absolutely incredible. Royco Dusk will have this on full display. It will be the first time that TradFi asset issuers and investors will be salivating for it.

[☄️⚡ @CometShock]

presented without comment
https://t.co/jZAzqSWKJW

[☄️⚡ @CometShock]

leverage looping is dead.

long live leverage.

[☄️⚡ @CometShock]

Got off a call earlier with a team who truly understands what makes @roycoprotocol stand out.

Sign of a great partnership in motion 🤝

[☄️⚡ @CometShock]

https://t.co/KNiEDI22Ry