OptN — index exposure without liquidations

Exposure to an index, built on options instead of debt. Split 1 WETH into a stable side (P) and a leveraged side (N). The two always sum to one unit of collateral, so the system is fully backed and nothing can be liquidated. Settlement moves assets — it never reads a price oracle.

1 · Open — split & recombine

2 · Exercise window

3 · Settled — redeem

The split

strike — · matures —

P · stable / tracks strike N · leveraged ETH

implied premium (rate P earns) · — vault collateral · —

Hold stable — take P

You want price stability and earn the premium. Split, then keep P (sell or hold N).

WETH to split into P + N

Your P: — · N: —

Go leveraged — take N

N is the ETH-upside side. During the window, exercise N: pay the strike in USDC, receive WETH.

N to exercise (pay strike, get WETH)

Opens at maturity.

Recombine

Before maturity, burn equal P + N back into WETH.

Amount

Redeem (settle)

After the window, burn P for a pro-rata share of leftover WETH + collected USDC. No oracle.

P to redeem

Testnet (Sepolia) — grab mock tokens:

How is there no liquidation?

Every P and N in existence is backed by WETH that was split to create it. P + N = 1 by construction. At maturity, if ETH is above the strike, N holders pay the strike in USDC to pull WETH out; the USDC they pay is what P holders collect. If ETH is below the strike, nobody exercises and P holders simply reclaim the WETH. Either way the vault only ever distributes assets it already holds, so no position can become undercollateralized and no oracle decides anyone's fate. The cost, versus a debt-based stablecoin, is that your exposure drifts gradually rather than holding a hard peg — you rebalance into a lower strike on your own schedule.