Treasuries can generate instant stablecoin income by writing covered calls on idle treasury tokens. This strategy allows them to: ✅ Earn upfront stablecoin premiums ✅ Retain control over tokens unless market conditions justify a sale ✅ Align value realization with favorable price movements
Example:
📌 A $10M WLD covered call with:
30-day expiry
110% strike price
$200K upfront premium received
🔹 Outcome Scenarios:
If WLD remains below the strike price → Treasury keeps WLD tokens, and the option expires worthless (out-of-the-money).
If WLD surpasses the 110% strike price → Treasury sells WLD for $11M in USDC (in-the-money).
🔹 Key Benefit: Treasuries monetize idle holdings while retaining control in sideways or falling markets.
Treasuries holding USDC (or yield-bearing stablecoins) can sell cash-secured puts to execute cost-efficient buyback programs.
Example:
📌 A treasury wants to buy back tokens using $500K USDC if the price drops more than 10% in the next 30 days.
🔹 Outcome Scenarios:
Treasury receives a $13,700 premium upfront.
If the token’s price does not drop >10% → Treasury keeps its USDC and pocketed the premium.
If the token’s price falls below the strike → Treasury buys tokens at the pre-agreed price.
🔹 Capital Efficiency Boost: Using yield-bearing stablecoins as collateral enables treasuries to earn both stablecoin yield and option premiums simultaneously.