DVPs & Vaults

Smilee protocol is based on two main contracts:
  1. 1.
    Decentralized Volatility Products (DVPs).
  2. 2.
    Earn Vaults.
At the smart contract level, the Earn Vault is simply called Vault.
Both DVPs and Earn Vaults are defined by:
  • A Reference Token (e.g. ETH, wBTC, …)
  • A Maturity Frequency (e.g. daily, weekly, …)

Decentralized Volatility Products (DVPs)

DVPs are smart contract that can replicate any kind of volatility payoff. The Impermanent Gain is the first kind of DVP launched by Smilee.
At the smart contract level, the Impermanent Gain is an instance of the DVP.
DVPs are used to mint and trade Impermanent Gain Options, which can be either IG Bull or IG Bear and are represented by ERC721 Tokens.
Impermanent Gain Smile is obtained by purchasing both IG Bull and IG Bear.
To know more about Impermanent Gain Bull, Bear, or Smile please refer to the Trade Section.

Earn Vaults

Earn Vaults provide the liquidity needed to mint and trade Impermanent Gain Options.
The Vault is divided into user shares which are represented by ERC20 Tokens.
The Vault replicates the payoff of a DEX Concentrated Liquidity position on the pair with a base token (typically USDC) and the reference token. The range is automatically selected using a multiple of the reference token volatility and it is auto re-balanced at maturity. To know more, please refer to the Earn Section.