Disclaimer: This is not investment nor investment advice. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.
The information made available in this report is NOT for replication. The purpose is to share the thought process behind the DAO’s decision making – additionally this is HIGH RISK journey for the DAO which means capital has also been allocated in accordance with this. Once again, DO NOT REPLICATE.The proposal being made aims to benefit from a market mispricing due to an inefficiency in the crypto market - the overall aim of this short/mid-term trade is to deliver a 3X to the DAO but it is yet to be seen what members decide.
This particular one was time sensitive and only a unanimous vote could help it skip the 72Hr waiting time for direct execution.
Status: Voted
Asset: Hegic | HEGIC (on Ethereum)
Description: Profit on market mispricing.
Thesis
- Everyone is familiar with my take on DeFi Derivatives and the special emphasis on Options. But this is in relation to the market not pricing in a 65% supply burn.
- The protocol launched a new version called “Hegic Hardcore”. Within that same proposal that improves the product by offering OTM (out of the money) Options and goes to Arbitrum L2, a 65% burn of the supply has occurred.
- Prior to the burn, the FDV stood at ~$100M at a unit price of $0.035. Assuming all things remaining equal and no upside buying pressure, the market should price in that same FDV which means a 3X rise in price towards $0.10.
Valuation & Risk Management
HEGIC is not a popular asset by any means - at least not in this moment in time. When the upgrade hit and the supply changed, even CoinGecko remains a laggard in changing the data. Assuming no new traction is achieved by the new upgrade and the burn does not apply upward pressure (all things equal), in theory the market should reprice to the same FDV which is a 3X rise to $0.10. The timeline for this trade is 3-months and it does assume that the market remains stable or up (no severe bear moves). I propose we invest $10,000 into this trade.
Research Links
Implementation Plan
Withdraw 10,000UST from Anchor, send to KuCoin, swap for HEGIC and store in our Alpha-DAO.ETH address.Note:If by the time this vote passes price has surpassed $0.06 then the trade should be skipped for reduced R:R. Only a unanimous vote can make this proposal pass immediately.
Votes: 5 YESRecommended from Cryptonary
