Protocol
GUARD
The protection leg: post stock, fund coupons, hold a put struck at S0.
Position
A GUARD leg represents escrowed Stock Tokens plus a USDG prefund. Economically it is the stock with a put struck at S0, paid for by coupons.
Deposit
GUARD deposits the Stock Token and a USDG prefund of notional × band cap × 12 plus the 0.60% notional fee.
Why prefund at the cap
The coupon is unknown until strike. Prefunding the maximum means every coupon that could ever be owed is already in escrow.
Matching at strike
Stock is valued at S0. If GUARD is oversubscribed it fills pro rata and the rest of the stock and prefund is refundable immediately.
Cash flows
| Event | GUARD |
|---|---|
| Paid observation | Coupon drawn from prefund |
| Autocall or maturity ≥ barrier | Stock back, unused prefund back |
| Maturity < barrier | Notional in USDG, unused prefund back; stock goes to CARRY |
Economic identity
Who uses GUARD
Long-term holders who want a floor at today's price for thirteen weeks without selling.
Transfers
GUARD legs transfer like CARRY legs and can travel with Omni.
Risk summary for GUARD
- Coupons paid in weeks the stock went nowhere.
- Stock leaves at S0 on a breach, so a later recovery is missed.
- Issuer and contract risk.