A cope-free way to hedge
If I’m in for the long-term for the rebase project, I foresee a short-term negative price action. I can hedge against rebase token price going down.
- I will predict price of the token is lower on the Entropyfi (50,50)
- If the price does go down, I can receive additional rebase rewards from people who predicted otherwise
- The additional rebase rewards can help offset the impact of price depreciation
- Think of soft hedge as insurance, and the payment is only the rebase reward for the duration of the protection
A sensitivity analysis