High yield always raises one question for me: who is actually paying it?
In @TermMax Alpha’s Dual Investment Vaults, the answer is surprisingly direct: Long and Short option buyers.
Traders pay premiums upfront to gain leveraged Call or Put exposure. Those premiums become yield for the Dual Investment liquidity providers taking the opposite side. TermMax’s own Alpha interface explicitly states that vault yields are paid by Long/Short buyers. (TermMax)
So the yield isn’t appearing from nowhere. It reflects real demand for optionality and leverage.
The trade-off matters, though. Vault depositors are underwriting those options, meaning returns come with exposure to the underlying asset and settlement conditions—not free yield.
That’s what I find interesting: higher option demand can create more premium income, but the yield exists because someone is accepting the other side of the risk. #termmax @TermMax
In @TermMax Alpha’s Dual Investment Vaults, the answer is surprisingly direct: Long and Short option buyers.
Traders pay premiums upfront to gain leveraged Call or Put exposure. Those premiums become yield for the Dual Investment liquidity providers taking the opposite side. TermMax’s own Alpha interface explicitly states that vault yields are paid by Long/Short buyers. (TermMax)
So the yield isn’t appearing from nowhere. It reflects real demand for optionality and leverage.
The trade-off matters, though. Vault depositors are underwriting those options, meaning returns come with exposure to the underlying asset and settlement conditions—not free yield.
That’s what I find interesting: higher option demand can create more premium income, but the yield exists because someone is accepting the other side of the risk. #termmax @TermMax