Native Hedge Liquidity

These are project run or managed pools. Each project, NEON Protocol included, can have it's investors to stake their native token and then assign it to the project's native hedge liquidity pool.

There are two types of Native Hedge Liquidity Pools:

• Native Equity Swaps

• Native Options

Native Equity Swaps

A project can use its pooled tokens to write native equity swaps. This means the project on behalf of its investors who assigned tokens, is the writer, and will take full liability or risk on the outcome of those equity swaps.

We rely on projects having their own farming strategies and farmers to write these native equity swaps.

Example:

Neon Protocol assigned farmers can identify demand for our token, beyond a price they deem reasonable based on the stage we are, in the crypto market cycle.

The farmers assess that we are in a bull market for the next 6 months maximum then we trend downwards, and that offering equity swaps with a duration of 1 year may be lucrative, carrying minimum to no risk.

NEON investors can stake tokens and assign them to a NEON hedge liquidity pool.

The farmers then write Equity Swaps with NEON as underlying asset for a duration of 1 year, pricing the option based on lucrative OTC rates.

Conclusion:

The goal for Neon Protocol and its investors is to pass the downside risk to the taker, if the price of NEON is below the start price or value when the swap expires in 1 year.

Native Options

A project can use its pooled tokens to write native call or put options. This means the project on behalf of its investors who assigned tokens, is the writer, and will take full liability or risk on the outcome of those options.

We rely on projects having their own farming strategies and farmers to write these options.

Example:

Neon Protocol assigned farmers can identify demand for Put Options of our token (NEON as underlying asset).

The farmers assess that we are in a bull market for the next 2 years minimum, and that these put options with a duration of 1 year appear lucrative with minimum to no risk.

NEON investors can stake tokens and assign them to a NEON hedge liquidity pool.

The farmers then write Put Options with NEON as underlying asset for a duration of 1 year, pricing the option based on lucrative OTC rates.

Conclusion:

The goal for Neon Protocol and its investors is to profit from the cost paid by the option takers, if the price of NEON is above the strike price or value when the option expires in 1 year.