VEEE 101 “Unleashed”
Dear Investor — We’re Here to Make Crypto Investing Easier
Welcome to the wonderful world of confusing finance things — where acronyms, math, and silly little charts swirl around in a jumble of stuff you forgot two days after taking your Finance 101 final.
Today’s topic is near and dear to my heart. By that, I mean Sang, our president, and CEO here at VegaX, is forcing me to write this.
TL;DR: Let’s break down VEEE:
VEEE stands for VegaX Enhanced Ethereum Exposure Token (I dare you to try and say THAT three times fast). It is based on one of our premier indexes — VEXM, which you can check out here.
So what is VEEE? (Great question)
VEEE, at its core, functions like a stock/cryptocurrency. You, as an investor, can head on over to VegaX.com and purchase VEEE in just one click — just like you would go on Robinhood or any other trading app to buy a stock/cryptocurrency.
Here’s the difference between VEEE and a stock or a cryptocurrency: VEEE is a financial product that trades with a strategy rather than just tracking the underlying asset.
VEEE’s strategy is twofold:
- VEEE is an Ethereum product built to generate consistent income through a technique dubbed a “covered call.”
- By generating consistent income, VEEE can act as a hedge against falling Ethereum prices — so even when ETH prices are down, we outperform the HODL technique.
Talk VEEE to Me:
What is a covered call? Great question. A covered call (aka a “buy-write strategy” because finance people like giving one concept two names) is one of the oldest tricks in the traditional finance world. It is an options strategy.
Now I know your eyes just glazed over because I wrote “options strategy.” Hang in there. I’ll make this quick.
Let’s say one Ethereum costs $1,000, and VEEE holds 100 Ethereum. This means VEEE is worth $100,000.
At the beginning of each month, VegaX sells a call on 10% of the Ethereum within VEEE at a strike price of $1,100. Selling a call means that VegaX HAS to sell 10% of its Ethereum at the end of the month at $1,100 if the price is at or above $1,100.
The person buying VegaX’s call is betting that Ethereum will be above $1,100.
VegaX, for giving someone the chance to purchase Ethereum at a discount at the end of the month, is given what we call a premium. For selling 10% of the Ethereum within VEEE, a number worth roughly $10,000, VegaX is paid $200, or 2%.
This is the consistent income mentioned earlier. Every single month, VegaX will receive that 2% premium, no matter if Ethereum goes up, down, or around.
Wait, so what happens if Ethereum goes up or down?
So, if the price of Ethereum goes up, let’s say it jumps to $1,200 from $1,000, VegaX would…
- pocket the 2% premium
- be forced to sell 10% of our ETH holdings at $1,100, missing out on the profit from $1,100-$1,200
- enjoy the portfolio gains as the rest of our ETH (90% of it) gains 20% in the move from $1,000K-$1,200
Now, if the price of Ethereum goes sideways, let’s say it ends the month at around $1,010, VegaX would…
- pocket the 2% premium
- keep all of the Ethereum #diamondhands
Eek, now let’s say Ethereum goes down, like way down, and ends the month at around $700 VegaX would…
- pocket the 2% premium
- send all of our investors tissue boxes to help with the tears of losing ~28% in one month
- keep all of the Ethereums and try again next month
note: in this scenario, VEEE would outperform holding ETH because we received the premium from selling the call, offsetting ETH’s 30% loss
Can you explain it in a chart?
Battle of the Ethereums: VEEE vs. ETH
Here’s the gist: When Ethereum is way up, ETH > VEEE. In any other situation, VEEE > ETH.
When Ethereum’s up, VEEE loses out on 10% of VEEE holdings obtaining massive gains. However, when Ethereum’s down, VEEE gets the guaranteed premium — thereby HEDGING the losses.
So how has VEEE done in comparison to ETH?
VEEE has consistently outperformed HODLing ETH, outpacing ETH by 33.7% in 2021. Look at all these returns in EXCESS of HODLing ETH:
The VEEE End Game: Actually Investing
If you are looking for…
- the best Ethereum product on the market
- an easy way to hedge against volatility
- a financial product that marries traditional strategies with crypto assets
then VEEE is a perfect match for your portfolio, and you should buy the VEEE token on VegaX today (using this link).
For more information:
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