Price Protection: Archetype Has Your Back

Hedge your bets and never lose with Price Protection on Archetype!

Author

Weka
June 21, 2024

Ever had your spot swap immediately start moving against you? Ever wanted to hedge your swaps but you’re too lazy to do so yourself?

Archetype is the answer to all your DeFi-related problems! Or at least most of them.

Price Protection lets users automatically hedge their swaps from unfortunate price action. Bought some wBTC but prices nuked right after? Archetype has got your back!

But what exactly goes on under the pretty frontend? How and when do I use Price Protection? What even is Price Protection? Let’s take a look!

What is Price Protection?

Price Protection is an optional feature that allows users to automatically hedge their spot swaps against unwanted downside.

It’s a simple toggle — when you’re swapping major tokens on Archetype, you’ll be able to flip the switch to enable Price Protection.

What the heck is transaction bundling?

Transaction bundling is a transaction management system native to Smart Accounts that simplifies and condenses complex actions for users that are making transactions. Just like Smart Accounts, transaction bundling is another feature falling under the umbrella of Account Abstraction.

With transaction bundling, only your imagination is the limit. More Archetype features leveraging tx bundling are in development.

What is Price Protection Duration?

By the power of transaction bundling, Price Protection automatically purchases a Put Option within the same transaction when executing a swap.

The Price Protection Duration chosen before the transaction directly translates to the Put Option’s Expiration Date. During this time, the executed swap is hedged by the Put Option, offsetting negative price action on the underlying token.

If you’re unfamiliar with how options and expiration dates work, consider visiting the Premia Academy. 

Fun fact — Archetype utilizes Premia Blue’s options back-end to enable Price Protection. Just a small teaser for what’s possible via tx bundling and account abstraction.

Once the duration of your Price Protection is up, the purchased Put Option reaches its expiration date.

Upon expiration, the swap is no longer protected, and the expired Price Protection can be settled for a potential profit inside the Portfolio.

When to Use Price Protection?

The protecc is for those that wish not to overthink their swaps — but to win even when a swap goes against them.

Think of it as a sort of insurance — buy some wETH without worry for the potential short-term downside. All the exposure with none of the stress.

Price Protection has been built for you with love by like-minded degens. For the past few years we’ve done a whole lot of swaps. We used to sometimes lose, but now we’re winning 24/7.

Remember my bros — always be selling. All hedge no edge. Stay winning.

The Future of DeFi is Smart (Accounts)

For long enough the EVM experience has been outshadowed by the Solami memer casino. Time for my EVM bros to rise up!

We’ve got all the buzzwords — intents, account abstraction, and core DeFi primitives. Archetype is set to revolutionize the way you, me, and everyone’s grandma trades on-chain.

Archetype is building the future of finance and we want you to join us! If you have any questions, don’t hesitate to join our community here.