Farming Pools

Neon Protocol aims to maximize the use of its technology to maximize revenue generation for NEON investors.

In a bid to maximize the revenue generated, NEON Protocol aims to provide Native Token Hedging, for both individuals (NEON investors) and outside projects.

The aim is to provide projects and their investors with the means to hedge their ERC20 tokens for profit or risk management. This service has an industry wide scope to create and capture the hedge volume of all projects that have native ERC20 tokens on Dexes.

NEON Holders

Neon token holders will be the first to have the ability to stake their NEON tokens and then assign them to a hedge liquidity pool. By doing this they are providing native hedge liquidity for our protocol. This means that NEON protocol, through our farming strategists, will use the staked tokens as collateral and write equity swaps or call options, with the intention of bringing the profit or proceeds back to the investors who assigned tokens to the native hedge liquidity pool.

Example

NEON Protocol, with the approval of the investors who stake and assign tokens to the native hedge liquidity pool, can write a native equity swap for 1 year, during a period when we anticipate our token price will decrease in value.

This means that if NEON token's price falls by 50% during that one year, that loss is compensated by the taker of the native equity swap. However if the price increases then the loss belongs to the stakers who assigned tokens to the native hedge liquidity pool.

As such, native equity swaps written by the protocol will be managed by professionals who can bring the best and safest farming results for out investors.

Outside ERC20 Tokens

In addition to providing native hedge liquidity functionality to NEON investors, we will expand this feature to also support other projects who wants to use this farming strategy for their own token investors.

Other projects can bring their own native ERC20 tokens to our protocol, and have the ability to stake their ERC20 tokens and then assign them to a hedge liquidity pool under their token address. By doing this they are providing native hedge liquidity for their token using our protocol. This means that other project owners / famers, will use the staked tokens as collateral and write equity swaps or call options, with the intention of bringing the profit or proceeds back to the investors who assigned tokens to their native hedge liquidity pool.

Example

VELA Protocol, with the approval of the investors who stake and assign tokens to VELA's native hedge liquidity pool, can write a native equity swap for 1 year, during a period when they anticipate their token price will decrease in value.

This means that if VELA's token's price falls by 50% during that one year, that loss is compensated by the taker of the native equity swap. However if the price increases then the loss belongs to the stakers who assigned tokens to VELA's native hedge liquidity pool.

As such, native equity swaps written by VELA are their sole responsibility, and all risk or liability lies with their investors.