SPYdw/Hedged SPY portfolio
The S&P 500, hedged. A floor that locks in gains.
SPYdw is an onchain token designed to track S&P 500 gains 1:1 while hedging downside risk.
Floor per SPYdw: –, read live from the SPYdw contract.
Illustrative · 12 months
Tracks the S&P 500 above the floor. Hedged below it.
Above the floor, SPYdw moves approximately 1:1 with the S&P 500. In this scenario the S&P 500 falls 22% and SPYdw is hedged at the floor. An illustrative scenario, not a forecast or a guarantee of future results.
How it works
See the positions01
Deposit, receive SPYdw
Deposit USDC and receive SPYdw, a token backed by the whole portfolio. Deposits and redemptions are processed at the next epoch, up to 7 days.
02
A ladder of options
S&P 500 call options are bought on a regular schedule with staggered 12-month expiries. The cadence goes from quarterly to monthly.
03
Yield pays for the hedge
The underlying collateral of SPYdw generates yield. That yield buys the S&P 500 options, and the collateral stays in place as the floor.
04
Gains lock in at each maturity
When a position matures, its gains join the floor, quarterly at first and then monthly, in step with the option ladder. Floor value per SPYdw is published live onchain.
Build with SPYdw
Lending collateral
Lend against SPYdw, with its live floor value as a clear onchain reference for loan-to-value. The floor is not tied to the S&P 500 price, so a flash crash in the index does not move it, and loans sized to the floor avoid the liquidations a sudden drop can force on plain S&P 500 collateral.
Margin and perps
A margin asset with a transparent floor that keeps its S&P 500 upside while posted. A flash crash in the index does not move the floor, so positions margined against it are less exposed to the forced liquidations that hit traders posting the S&P 500 itself.
Automated portfolio construction
A building block for long-term holders who want diversified, long exposure to the US market, with less price volatility than holding the S&P 500 outright.
Historical SPY closes since 2016/1 year hold
Hypothetical backtest
A four-position quarterly ladder, simulated on historical SPY closes. These are hypothetical results, not actual results: SPYdw has no trading history, and a simulation is not a forecast or a guarantee of future results. Pick an entry date and how long to hold to see how the simulated ladder behaved. The hatched area is the part of an S&P 500 drop the simulation did not follow.
Ten years of SPY · click or drag to move the entry
- Entry days tested
- 2,001every trading day since 2017
- Down after 1 year
- 7.1%of simulated entries, vs 17.5% for the S&P 500
- Avg 1-year change
- +14.67%simulated, vs +13.73% for the S&P 500
- Avg floor at entry
- 93.0%of price; worst simulated year −7.63% vs −21.01%
Common questions
What does SPYdw track?
SPYdw is an onchain token designed to track S&P 500 gains 1:1 while hedging downside risk. Above the floor, it moves approximately 1:1 with the S&P 500. Below the floor, it is hedged.
Where does the floor come from?
The floor is the value of the collateral, which stays in place while the options run. S&P 500 call options are bought on a regular schedule with staggered 12-month expiries, and the cadence goes from quarterly to monthly. When a position matures, its gains join the floor under every token. Floor value per SPYdw is published live onchain.
What pays for the hedge?
The underlying collateral of SPYdw generates yield, and that yield is used to purchase the S&P 500 options. The collateral itself stays in place as a floor that hedges against a market downturn, so holders keep the upside without paying for the hedge.
How is SPYdw different from traditional protected S&P 500 products?
Traditional protected S&P 500 products, like principal-protected notes and buffer ETFs, typically pay for their downside protection by giving up upside: gains are capped at a set level, or you only capture part of the index's rise. SPYdw does not give up upside to fund its hedge. The yield on its underlying collateral buys the S&P 500 options, so SPYdw is designed to track S&P 500 gains 1:1, uncapped, while hedging downside risk.
Can SPYdw really hedge all downside risk?
Yes and no. Over a 12 month holding period, the options portfolio is held to expiry, which is designed to give a reliable downside hedge. Over shorter periods, what you receive when you sell or redeem SPYdw depends on the current mark to market of the options portfolio, which can fluctuate with volatility. SPYdw is a good hedging instrument, but it is not principal-protected, and no one can guarantee its price will never go down.
How do deposits and redemptions work?
Deposits and redemptions are processed at the next epoch, and an epoch runs up to 7 days. Redeeming before the end of an epoch incurs an early-exit fee. SPYdw can also be bought and sold on its Uniswap v4 pool on Ethereum, at the pool price.
Who can access SPYdw?
SPYdw is offered to institutional participants.
People from the following jurisdictions cannot directly access our services and cannot directly mint or burn SPYdw:
- Americas: United States, Cuba, Nicaragua, Venezuela
- Europe / ex-USSR: Russia, Belarus, Crimea, Ukraine’s Donetsk and Luhansk regions, Abkhazia, South Ossetia, Northern Cyprus
- Middle East / Asia: Iran, Syria, Lebanon, Yemen, Afghanistan, North Korea, Myanmar
- Africa: Angola, Burundi, Central African Republic, Congo, Ethiopia, Guinea-Bissau, Ivory Coast, Liberia, Libya, Mali, Somalia, Somaliland, South Sudan, Sudan, Zimbabwe