Greetings from Tbilisi, Georgia!

The Winter Fun has come to Tbilisi, with a lot of snow and some time to think and adjust our trades.

Last week was quite bad for the TerraM token, and most of the time we were adjusting our options trades on the Deribit trading platform.

For the first time since launching, the total value of the TerraM token actually decreased.

Bad luck and overtrading with futures are to blame. We tend to hedge every open position with futures. The downside of such hedging is price oscillation. This is what actually happened to us last week a few times.

Ethereum challenged our strike prices, which we hedged with futures, but then a pullback happened, which again made pain for the futures.

Trading is not an easy business, and trading with futures can be very dangerous.

Anyhow, despite the total value decreased (we still rolled up and away from challenged positions, and there is a great chance for recovery in the upcoming months)

With challenged positions rolled away, our 'poor man's crypto hedge fund' for options trading on Ethereum, made quite a decent $53.01 from expiring options trades this week.

All profit was distributed back to the token holders + used to increase liquidity on the Raydium pool. About 3.29% yield in 7 days.

Trades & Profit distribution

We use the capital raised with the TerraM token to sell options on Ethereum, and all profit incurred from options trades is distributed back to the TerraM token. 

Our goal is about 25-30% annual growth

In total, we had 3 options trades expiring on January 13, 2022, 2 out of 3 expired worthless while one position is rolled forward to January 27.

From the option trades with Ethereum tokens on the Deribit trading platform last week, we were able to book 0.0372 ETH / $53.01 USD profit.

Every week on Fridays (after options expiry on the Deribit platform) we distribute profit back to the token holders + increase the liquidity pool to guarantee enough coin offerings on the Raydium exchange.

As TerraM's total supply is 10,000, this week each token holder received 0.00372 USD per token (53.01/10,000).

Profit was distributed in form of additional TerraM coins to the token holders from the TerraM token address with balances larger than 20 TerraM. Any uninvested token profit was kept on the Deribit trading platform to increase buying power.

Since the inception of the TerraM crypto hedge fund, we have already made and distributed $306.19 or about 19.01% yield (from the current value)

Open options trades

At the time of writing, we are holding 7 options trades open on Ethereum, with the following strikes and expiry dates

• January 20: 1x 1400 put; 1x 1300 put (as long as ETH stays above $1,400 we make a profit)

• January 27: 2x 1300 calls; 1x 1350 put ( it will be a challenge to adjust $1300 calls)

• March 31: 2X1500 calls

Liquidity pool

We contributed to the Raydium liquidity pool with USDC/TerraM pair by staking an additional USDC 18.44 / TerraM 20.49.

• Pool liquidity (TerraM): 196.34 TerraM

• Pool liquidity (USDC): 176.71 USDC

This means that basically anyone can buy/sell 196.34 TerraM coins, which is about 1.96% of the total token supply. We plan to raise and keep our total liquidity on the Raydium pool to about 3-5% of the total coin supply.

Assets under the TerraM token

Most of the assets for TerraM token are held in ETH. Makes sense, as ETH is the coin we trade options with on the Deribit trading platform.

Additionally, we held reserves of 11% in USDC, 12.4% ETH, 1% in BTC and 0.2% in SOL

• USDC: 176.71 (+18.44)

• ETH: 0.1421 (+0.0213)

• BTC: 0.00086134 (+0.00014206)

• SOL: 0.187412709 (+0.063825679)

• Tradeable ETH: 0.8621 (-0.2989)

We took quite an impressive hit by losing -0.2989ETH last week, nevertheless, we hope to recover the loss and look at this as a paper loss (at least for now)

75.4%. of the total assets are used for actual trades on the deribit platform, while 24.6% are stored as reserves. We plan to rebalance the portfolio at the end of the month.

Price:

While we have set the 1:1 ratio exchange ratio between TerraM and USD, on the Raydium network 1 TerraM was trading at $0.88787312

Swap USDC for TerraM coin on Raydium

The Bottom Line

Despite a value loss, we took this week, we are truly excited at the start of this journey and we hope to be fully invested by mid-2023, until then, there are still 7,510 TerraM tokens available for investment.

Swap some TerraM on the Raydium or simply hit the reply button to learn about other investment opportunities.