Buying and Selling

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Last updated 1 year ago

Buying and Selling

While it is possible to , most users will acquire these tokens by buying them. The protocol and arbitrage ensure that each tokens price is always below 1 ETH, enabling leveraged long positions with plETH and leveraged yield farming with ybETH.

Buying plETH

Users can buy plETH to enter a leveraged long position on ETH.

As an example, suppose Alice is an ETH maxi. She is sure that ETH will hit a price of $15,000, and she wants to double down on this bet.

She goes to HODL.money, and selects the unlock price of $15,000. The protocol quotes her a price of 0.65 ETH per plETH at that level. She deposits 10 ETH, giving her 15.4 plETH at an unlock of $15,000.

Now, Alice waits and hodls.

Some time passes, and the unlock of ETH at $15,000 is reached! Alice can redeem her 15.4 plETH for 15.4 ETH.

Alice made a profit of 5.4 ETH. And moreover, she got the following benefits over other forms of leverage:

Compared to options, there was no expiry on her position. Whether the unlock was reached in 5 days or 5 years, Alice's profit is locked in at 5.4 ETH
Compared to perpetuals, there was no risk of liquidation. If the price went to $1 before reaching $15,000, Alice still gets her profit of 5.4 ETH. In a perpetuals protocol, Alice would have been wiped out by liquidation and lost all her ETH.

Buying discounted plETH is a great way for ETH maxis like Alice to double down on their price targets.

Buying ybETH

Users can buy ybETH to obtain leveraged yield farming positions.

As an example, suppose Bob is trying to yield farm ETH, and he wants to get the highest APY possible.

Bob goes to HODL.money, and checks out the markets. He sees that he can buy ybETH at an unlock of $8,000 for just 0.08 ETH.

Bob knows that ybETH positions only generate yield until the unlock price hits. He's pretty sure ETH won't hit $8,000 for a while, so he's comfortable with that risk. He goes ahead with a swap of 5 ETH for 62.5 ybETH.

This purchase gives 12.5x leverage on yield from the underlying liquid staking token. If that token is stETH, Bob will get aroudn 47.5% APY.

Bob collects his yield until the unlock price, and his profit depends on the time it takes to reach that price. Once the unlock price is reached, his balance of ybETH is rebased to 0.

PreviousYield Bearing ETH (ybETH)NextLiquidity

Last updated 1 year ago

Buying plETH

Users can buy plETH to enter a leveraged long position on ETH.

As an example, suppose Alice is an ETH maxi. She is sure that ETH will hit a price of $15,000, and she wants to double down on this bet.

Now, Alice waits and hodls.

Some time passes, and the unlock of ETH at $15,000 is reached! Alice can redeem her 15.4 plETH for 15.4 ETH.

Alice made a profit of 5.4 ETH. And moreover, she got the following benefits over other forms of leverage:

Compared to options, there was no expiry on her position. Whether the unlock was reached in 5 days or 5 years, Alice's profit is locked in at 5.4 ETH
Compared to perpetuals, there was no risk of liquidation. If the price went to $1 before reaching $15,000, Alice still gets her profit of 5.4 ETH. In a perpetuals protocol, Alice would have been wiped out by liquidation and lost all her ETH.

Buying discounted plETH is a great way for ETH maxis like Alice to double down on their price targets.

Buying ybETH

Users can buy ybETH to obtain leveraged yield farming positions.

As an example, suppose Bob is trying to yield farm ETH, and he wants to get the highest APY possible.

Bob goes to HODL.money, and checks out the markets. He sees that he can buy ybETH at an unlock of $8,000 for just 0.08 ETH.

This purchase gives 12.5x leverage on yield from the underlying liquid staking token. If that token is stETH, Bob will get aroudn 47.5% APY.

Bob collects his yield until the unlock price, and his profit depends on the time it takes to reach that price. Once the unlock price is reached, his balance of ybETH is rebased to 0.