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 Daily SharkFin?
Gate.io Daily Shark Fin product is a capital-protected product. It is flexible and richer in products and will be launched frequently. It supports a variety of mainstream currencies and offers more options for the lock-up period and annualization.
Daily Shark Fin product yield mode: within a certain period of time, if the prices stay within (not break/fall out) the per-specified price range, users can earn a higher annualized yield rate.
If the prices exceed the price range, users can still obtain a guaranteed return.
How does the Daily SharkFin product bring you a return?
There are two ways to make money with Daily SharkFin.
- During the observation period, if the prices of the target asset stay within the per-specified price range (i.e., the hit range), users can earn a higher annualized income. At settlement, the closer the prices of target asset price are to the upper limit of the price range, the higher the annual return.
- During the observation period, if the prices of the target asset have gone beyond the price range (i.e., the knock-out range), the user can obtain a guaranteed return.
How to Calculate Your Return (Example)
If the Daily SharkFin product B is 4%-18% annualized and locked for 5 days, and the price range is $47,500-$51,700, but the settlement price on January 2nd is $49,196.39, the return will be calculated as follows:
- If the prices are in the hit range, the user can finally obtain a high annualized rate of 8.25%.
Final yield = 3% + (settlement price - lower limit price) / (upper limit price - lower limit price) * (16% - 3%)
= 4% + (49,196.39 - 47,500)/(51,700 - 47,500)*(18% - 4%)
- If the prices are in the knock-out range, the user can finally get a 4% guaranteed return.
Pros and Cons of SharkFin Products
1. No risks and capital-guaranteed: it provides an opportunity for holders to earn without risks.
2. High-yield opportunities: Users who are good at predicting market volatility can get much higher returns than with ordinary financial products.
3. Simple operation: As the complex underlying hedging links have been brought under a structure, users can participate with one click.
1. Lock-up risk: Once participated, the funds will be locked and cannot be redeemed in advance.
2. Value depreciation risk: From the perspective of the standard currency, it is capital guaranteed, but for other valuation methods, there is also a risk of depreciation caused by the downmarket.
3. Fluctuation risks: SharkFin products are more suitable for stable market conditions. Even if the price breaks the pegged price in the short term, investors can only get the lowest guaranteed return.
1. What is the difference between SharkFin products and ordinary lock-up products?
The lock-up operations for both types of products are the same. However, SharkFin products have two settlement methods and offer a chance for users to win a higher annualized rate of return.
2. What kind of market and user type are SharkFin products suitable for?
SharkFin is a kind of low-risk financial product. It is more suitable for the predicting market with less volatility and for users who prefer low risk.
3. How to calculate interest with the known annualized yield?
If the annualized yield is A, then: interest = A / 365 * lock-up days
4. Will the determined price range be adjusted during this period?
If the market fluctuates drastically before the observation period starts, we will adjust the price range to maximize investors’ returns. During the real observation period, we will no longer make price adjustments.
5. When will the interest be paid after the lock-up ends?
Generally, the interest will be automatically paid on the same day after the interest is settled. However, if the settlement time is after 12:00 UTC+8 on the same day, the interest will be paid the next morning.