The post Meet the project bringing TradFi’s ‘degen products’ to Solana appeared on BitcoinEthereumNews.com.

This is a segment from the Lightspeed newsletter. To read full editions, subscribe. I was on a Google Meet with Benedikt Schuppli when the co-founder and CEO of Obligate began screen-sharing his email inbox.  “Can you see this?,” he asked, pulling up an email from a Swiss bank with a large graphic advertising a 175% participation rate for a financial product. “If this wasn’t a Swiss bank you’d be thinking, ‘Well, that’s obviously some type of scam. Someone’s trying to sell me 175% yield.’” The Swiss bank was offering Schuppli a structured product, a financial instrument that the CEO called the “degen products of TradFi” — and he’s now trying to bring it to crypto with his new startup Margarita Finance. The basic premise of Margarita is that users can easily mix their yield appetite and risk tolerance like a cocktail. Schuppli hopes the project’s blockchain backing can cut out intermediaries that drive up costs and let a new market segment tap into structured products, which offer the sort of risk curve that DeFi users tend to like. Structured products are pre-packaged investments that involve a bond and a call option typically on a basket of assets or an index. Structured products don’t lose their principal investment if the optioned assets fall in value because of the bond’s appreciation in value, so they theoretically present less risk than just trading options. Traditional structured products have lots of middlemen that charge fees, and these fees are passed onto investors, Schuppli said. With Margarita, he said, his team has created a “fully programmable digital asset” that makes fee structures less opaque.  Margarita currently lets users invest a minimum of 10 USDC with an option on the price of SOL. Investors can set their preferred yield and maturity date, and they’re then offered…

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Filed under: News - @ December 11, 2024 3:27 pm