Stake DAO

Bitcoin Covered Call Strategy live on Stake DAO!

To double down on the success of our ETH Covered Call Strategy (~25–30% APY), we’ve launched a BTC Covered Call Strategy for all our Bitcoin holders out there!

Herd, covered calls might just be the sexiest strategy you’ve never heard of. Whether you’re a long, mid, or short-term holder of Bitcoin, you can use covered calls to generate yield in neutral to bullish markets, and offer downside protection when the market doesn’t go your way!

How does the strategy work?

These premiums are added into the strategy and compounded, producing an annual percentage yield. The goal for the Stake DAO BTC Covered Call Strategy is for the options sold each week to expire worthless, allowing depositors to earn juicy option premiums while maintaining wBTC upside.

Decentralized options protocol Opyn powers the call-selling process — you can check out our podcast interview with their founder here.

How does the strategy generate additional yield? What is the APY?

In practice, the APY generated from the strategy is: (Weekly Options-writing yield *52 weeks) + Passive BTC APY. Based on current rates and strategy deposits, Annual Percentage Yield on the Active wBTC Options Strategy should exceed 30% APY.

What are the risks of using the strategy?

Furthermore, the strategy may incur slippage when you deposit or withdraw wBTC, as your wBTC is used to deposit or withdraw liquidity on the Curve sbtc pool. Depending on the imbalance in the pool, the slippage can work in or against your favor. However, we ensure that you won’t face more than 0.2% slippage when you deposit on our front end.

As with all Stake DAO strategies, there is a risk of smart contract failure in the underlying vault — in this case, the Curve Finance wBTC pool and the Opyn contracts.

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