$ETH may be swapped for $rDPX if rDPX/ETH ratio falls by more than 25%
What is the PPV?
The Perpetual Put Vault ("PPV") allows liquidity providers to deposit $ETH to earn multiple layers of yield.
$ETH from the PPV is reserved to write 25% OTM rDPX-ETH puts on $rDPX that is bonded into the system. In the event these are triggered, $ETH will be swapped for $rDPX at the corresponding strike price.
How does the PPV work?
During the STIP, PPV depositors are receving $ARB incentives only. Once this expires, the other revenue streams will be activated.
$ETH in the PPV may be redeployed to a staking provider such as Lido Finance or FraxFerry to earn native staking yield.
rDPX v2 Fees
The PPV will receive a portion of fees from the rDPX v2 system. The amount to be distributed is calculated at the beginning of each week and streamed linearly throughout that duration.
Asset-Settled Swap (ETH -> rDPX)
Each time a new user bonds in to rDPX v2, $ETH from the PPV is reserved to write 25% OTM rDPX-ETH puts based on the current spot price.
In the event the rDPX/ETH ratio falls below the 25% OTM price, corresponding $ETH from the PPV will be swapped for $rDPX. This means a depositor may be able to withdraw $ETH, $rDPX, or both based on the outcome of written puts.