What's SharkFin?
Gate.io SharkFin products are a type of capital-guaranteed structured product. It is called SharkFin because the yield curve resembles that of a shark's fins sticking out of the water. It is essentially an option derivative, also known as knock-out options. When SharkFin is listed, product parameters such as the target currency, subscription limit, and lock-up period will be determined according to the market. What is fixed is only the final interest. The interest earned depends on whether the price of the target currency goes beyond (falls below/rises above) the price range during the investment period. If it does, investors can get a higher annualized income, and if it does not, investors can still obtain a guaranteed return.
Gate.io currently has listed Daily SharkFin, Bullish SharkFin, and Bearish SharkFin products.
What's Bullish SharkFin?
Gate.io's Bullish SharkFin is a type of capital-protected product. Investors can subscribe to the product based on the supported underlying currencies. The APR at maturity is determined based on the comparison between the observed price of the target currency and the price range. Interest is calculated, and the principal and interest will be settled and redeemed at maturity. Early redemption is not supported.
Bullish SharkFin return mode: Within a certain period of time, if the price always stays within the price range, investors will obtain a high yield rate; once a knockout happens to the product, investors still have a chance to get a medium yield and can at least obtain a guaranteed rate of return. Opposite to the profit mode of Bearish SharkFin, Bullish SharkFin is suitable for a bull market.
Profit modes for Bullish SharkFin
There are 3 ways to make money.
- During the observation period, if the price of the target asset always stays within the per-specified price range (i.e., the hit range), investors can earn a higher annualized income (the guaranteed yield rate＜the final yield rate ≤ the maximum yield rate); At settlement, the closer the price of the target asset is to the upper limit of the price range, the higher the annual return.
- During the observation period, if the price of the target asset has risen above the upper limit of the price range but hasn't fallen out of the lower limit of the price range (i.e., knock-up range), the investors will obtain a medium yield rate.
- During the observation period, once the price of the target asset has fallen below the lower limit of the price range (i.e., knock-down range), the investors can obtain the guaranteed yield rate.
How to Calculate Your Return (Example)
If a Bullish SharkFin product under BTC/USDT perpetual contract offers an annualized yield of 4%~20%, a medium yield of 10%, the lockup period is 8 days, and its price range is $43,500-$48,700, and the reference price on settlement date is $47,008.87, then the return will be calculated as follows:
- The price hits the range and the settlement is made based on the yield of 4% - 20%.
Condition: during the observation period, the price is $43500＜BTC price ≤ $48700
Final yield = 4% + (settlement price - lower limit price) / (upper limit price - lower limit price) * (20% - 4%)
= 4% + (47,008.87 - 43,500)/(48,700 - 43,500)*(20% - 4%)
= 12.41%
The rate of return = principal * annualized rate of return at maturity / 365 * investment terms
- The price fails to hit the range and investors obtain a medium yield of 10%.
Condition: during the observation period, once the BTC price was＞$48700 & BTC price was always＞$43500
The rate of return = principal * 10% / 365 * investment terms
- The price fails to hit the range and investors get a guaranteed yield of 4%.
Condition: during the observation period, BTC price was once ≤ $43500
The rate of return = principal * 4% / 365 * investment terms
FAQ
1. What’s the difference between Bullish SharkFin and other SharkFins?
The difference is that their price ranges are different. The price range of Bullish SharkFin is suitable for a bull market. Therefore, if the price of the underlying asset rises, investors will have a greater chance to obtain high returns. In addition, compared with Daily SharkFins, Bullish SharkFin provides more profit modes and a higher probability of obtaining high returns. It is better to subscribe to a Bullish SharkFin in a rising market.
2. How to calculate interest with the known annualized yield?
If the annualized yield rate is A, then the interest = A / 365 * lock-up days
3. Will the determined price range be adjusted during the period?
If the market fluctuates drastically before the observation period starts, we will adjust the price range to maximize investors’ returns. During the observation period, we will no longer make price adjustments.
4. During the observation period, if the price has not only fallen below the lower limit of the price range but also risen above the upper limit of the price range, will the return be calculated based on the high or low yield rate?
During the period, if the price has fallen below the lower limit of the price range, the return will be calculated according to the lowest yield rate; if the price has only risen above the upper limit of the price range but hasn't fallen below the lower limit of the price range, then the return will be calculated based on the medium yield rate.
Gate.io reserves the final right to interpret the product.
