Whiteheart Alpha Mainnet Release
Whiteheart is an on-chain hedging protocol that can help tens of thousands of DeFi users to automatically protect the USD value of their holdings from losses. You can think of Whiteheart as it is the Red Cross of crypto: the Red Cross saves people’s lives while Whiteheart saves your money 🤍
You can learn more from the one pager: Whiteheart: Hedge Contracts as a New Financial Primitive for Automated On-chain Hedging of Crypto and Stocks
Introducing WHETH & WHWBTC
The alpha version of Whiteheart offers two types of hedging in the form of WHETH and WHWBTC with hedge contracts integrated into them.
🤍 WHETH (Whiteheart ETH) is a wrapped Ether (ETH) plus an ATM (at-the-money) put option in it that automatically protects its holders from the USD losses during a fixed period of holding.
🤍 WHWBTC (Whiteheart WBTC) is a wrapped WBTC (wrapped “Wrapped BTC”) plus an ATM (at-the-money) put option in it that also automatically protects its holders from the USD losses during a fixed period of holding.
Each WHETH and WHWBTC is 100% collateralized by liquidity allocated in the Whiteheart hedging pools. The collateral is denominated in USDC stablecoins. Thus, in the event of a price drop (up to -100%) the difference in USDC will be paid to WHETH and WHWBTC holders in full.
WHETH and WHWBTC (wrapped and protected ETH and WBTC) can be easily tokenized into transferrable ERC721 tokens. This opens up a unique set of unprecedented opportunities to leverage WHETH and WHWBTC assets in lending protocols, AMMs, indices and other venues as collateral or liquidity that is protected from the USD losses by design.
Imagine providing WHETH or WHWBTC as collateral in lending protocols, or allocating liquidity in AMMs without risking losing the USD value of your assets in the event of short-term or mid-term bear markets.
The importance of this new financial primitive can hardly be overestimated.
Protection Cost
The WHETH prices start as low as 🤍 9.90% for four weeks (28 days) 🤍 for USD loss protection. For example, if you want to be fully protected from USD losses during 28 days, it would cost you ~$162 or (!) twenty four cents per hour for Ether (ETH).
The same 28 days USD loss protection with WHWBTC would cost you 🤍 6.90% for four weeks (28 days) 🤍 $3,691 or (!) $5.5 dollars per hour for Wrapped Bitcoin (WBTC).
Note that real-time WHETH and WHWBTC prices may differ as they depend on the market prices of ETH and BTC.
Whiteheart uses ChainLink price feeds as a source of data to estimate the real-time prices of assets and calculating the cost of protection.
The available periods for holding WHETH and WHWBTC at this stage can be selected in the range from 14 to 28 days.
Protocol’s Fees Distribution
The Whiteheart protocol generates and distributes fees in USDC stablecoins. When a user acquires a hedge contract in the form of WHETH or WHWBTC, the Ether (ETH) they pay for it is automatically swapped to USDC and distributed as follows:
● 30% distributed among the sWHITE (staked WHITE) holders
● 30% distributed among the USDC hedging pool liquidity providers
● 20% distributed among the HEGIC staking lots holders:
- 10% among the WBTC staking lots holders
- 10% among the ETH staking lots holders
● 20% distributed among the Hegic pools liquidity providers:
- 10% among the WBTC pool LPs
- 10% among the ETH pool LPs
*The distribution of Whiteheart fees among HEGIC staking lots holders, as well as the Hegic pools liquidity providers, will be conducted on a quarterly basis, with the first fees distribution scheduled for June 10th, 2021.
Projected Staking ROI
DISCLAIMER: Not financial advice. There are no guarantees of dividends or positive returns for WHITE or sWHITE holders. Do your own research.
As stated above, 30% of all fees generated by the Whiteheart protocol are distributed pro rata among the sWHITE (staked WHITE) holders. Fees are generated on providing hedging in the form of WHETH and WHWBTC.
Note that sWHITE holders are NOT exposed to the potential losses on hedging WHETH and WHWBTC holders. They can withdraw the same amount of WHITE they have staked (24H withdrawal lock-up may apply).
Regarding to the initial prices, which are set at ~9.9% per 28 days for WHETH and ~6.9% per 28 days for WHWBTC, it is possible to project the estimated amount of USDC fees that would be distributed among the sWHITE holders after the protocol will start gaining traction.
For example, $20M would be deposited into the USDC hedging pool. This liquidity would be used to collateralize WHETH and WHWBTC and protect their holders from USD losses.
50% of the pool ($10M) would be utilized in WHETH and 50% of the pool ($10M) would be utilized in WHWBTC. This would result in a gross amount of monthly fees of $690K for WHETH and $990K for WHWBTC. 30% of the fees would be distributed among the sWHITE holders.
$207K (30% of gross fees) received from WHETH plus $297K (30% of gross fees) received from WHWBTC = $504K is the projected monthly amount of fees earned by sWHITE holders with $20M utilized in the pool.
This brings the projected annualized fees to +$6,048,000 in USDC.
The total supply is 8,888 WHITE with 100% of tokens in circulation from day one. The WHITE market price at the time of writing is around ~$4,000.
Let’s assume that 50% of the total supply would be allocated in staking for earning fees in USDC. Thus, ~$17,776,000 of WHITE would be staked.
With ~$17,776,000 staked and +$6,048,000 of projected annualized staking fees generated, an estimated ROI will be 🤍 +34.02% APY in USDC 🤍.
Note that this is a theoretical example. The real variables would be different. However, you can easily make the same calculations yourself for the actual numbers at the time of the ROI analysis.
The future is bright! Because future is WHITE 🤍
The vision behind Whiteheart is to help DeFi users, as well as crypto and stock holders, save $1,000,000,000 (one billion dollars) over the next 3 years, starting now. Whiteheart should become a hedging protocol that will have a quantifiable positive impact on humanity.
The fundamental idea behind Whiteheart is to take a leap into the future where Hegic will become cheaper, easier and accessible to millions of users around the world. In other words, transforming a complex hedging process into something simple and accessible to anyone.
Whiteheart is a gentle fork of the Hegic protocol because it must have its own independent liquidity pools to serve hedging purposes without confusing use cases with the pure options trading that happens on Hegic.
A gentle fork is an attempt to show the community of ambitious developers of new DeFi protocols a new way of praising the efforts of other developers while sharing the future economic successes of the fork with the forked protocol.
Whiteheart is developed by Juan (jmonteer23) and Molly Wintermute (0mllwntrmt3) as well as has been audited by Peckshield. The security audit report can be found here.
Note that some changes (in particular, the fees distribution mechanism) were made after the completion of the security audit. Remember that a security audit is NOT a guarantee that the protocol is secure. Always do your own research and inspect the open source code by yourself.
Hedging pools on Whiteheart will be gradually seeded with liquidity attracted from WHITE IBCO. The initial amount of provided liquidity is $201,000 in USDC. Since the risks of providing liquidity on Whiteheart are currently unknown and bugs may be found in the deployed code, there is no interface for providing liquidity on Whiteheart. Wait for the alpha mainnet version to be well tested and don’t risk with your own funds.
Protect your ETH and WBTC: https://www.whiteheart.finance/ 🤍
IMPORTANT DISCLAIMER: WHITEHEART IS LIVE IN ALPHA. USE IT AT YOUR OWN RISK. DON’T USE IT IF YOU CAN’T AFFORD TO LOSE 100% OF FUNDS. YOU WON’T BE COMPENSATED IN CASE OF ANY LOSSES RELATED TO THE WHITEHEART PROTOCOL. THE PROTOCOL IS BEING DEVELOPED AND ANY PART OF IT COULD BE CHANGED AT ANY TIME. IF YOU DO NOT AGREE WITH ANY PART OF THIS DISCLAIMER, PLEASE NEVER USE WHITEHEART.
