In our whitepaper “3Jane Protocol: Unlocking Crypto-Native Derivatives Yield”, we coin a term called “Derivatives Yield”. What exactly does this term mean?
Loosely, it means any income-like yield earned from trading derivatives such as perpetuals and options. In crypto, this yield will mainly come from two places:
cash & carry yield (perpetuals). This is Ethena.
options premiums yield (options). This is 3Jane.
Ethena sUSDe is just a construction of two positions:
long stETH spot
short ETH perpetuals on an exchange (collateralized by stETH)
By doing this, Ethena is effectively an onchain delta-neutral vehicle for farming derivatives yield — particularly the funding rate from exchanges.
3Jane eETH-C is just a construction of two positions:
long eETH spot
short ETH deep out-of-the-money options* on 3Jane (collateralized by eETH)
By doing this, 3Jane is effectively an onchain vehicle for farming derivatives yield — particularly the options premiums yield over-the-counter.
Mainnet coming soon.
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3Jane will not be offered to persons or entities who are U.S. Persons, Restricted Persons, or Sanctioned Persons. Access and use by such persons is expressly prohibited.
*Options are a type of derivative that grants options buyers access to leverage in crypto without getting liquidated, unlike perpetuals. However, just like perps traders must pay a funding rate to be able to trade on leverage, options buyers must pay something equivalent to options sellers called a premium to get access to leverage. As a result, selling options is commonly used as a way to earn yield by collecting premiums in exchange for taking on a short volatility position. Options are a multi-trillion dollar market in traditional finance. Selling options is not a risk-free strategy. Read more here.