Minting
Last updated
Last updated
Price Locked ETH (plETH) is a derivative token for taking a leveraged long position on ETH.
The plETH token is built on top of liquid staking and restaking tokens, and works with a complementary yield bearing derivative, ybETH.
To understand plETH and ybETH, lets walk through an example of how the two are minted, how plETH is redeemed, and how ybETH gets yield.
The plETH and ybETH tokens are minted from ETH. The following diagram shows the minting process.
To mint, the user selects a strike price and deposits 1 ETH into the HODL.money contract. That contract stakes ETH into 1 stETH, and deposits it into the vault. The vault mints 1 plETH and 1 ybETH for the depositer.
Each plETH token has an associated unlock price. Once that unlock price is reached, the plETH token can be redeemed 1:1 for the underlying, for example stETH.
For example, if the user holds 10 plETH at an unlock price of $10,000, he can redeem that for 10 stETH, but only once ETH's price reached $10,000.
Until the unlock price is reached, the plETH token can be transferred like any standard token.
The ybETH token is the counterpart to plETH. It takes its unlock price from plETH, and receives staking yield from the underlying until that unlock price is reached.
For example, if the user holds 50 ybETH with an unlock price of $10,000, he receives the staking yield of 50 stETH until that unlock price is reached.
Once the unlock price is reached, the users balance of ybETH is rebased to 0.
