Prodigy.Fi Product 101 Series: Maximising Yields with Prodigy.Fi Dual Investment — Strategies for All Levels

Welcome back to the eighth edition of the Prodigy.Fi Product Education 101 Series! We are also excited to kick off a brand-new series focused on Yield Strategies using Dual Investment and Other Structured Products.

If you missed our earlier Product 101 editions, you can start here. But in this next series, we are diving deeper and unpacking how to put your crypto to work using DCI vaults and other structured products.

Because let’s face it, there’s no reason your assets should sit idle when they could be earning yield regardless of where the market moves.

To kick things off, we will explore how to maximise returns using different DCI strategies on Prodigy.Fi, whether you are just getting started or already a DeFi native. Plus, we will explore the mechanics of yield generation, including APY calculations, trading fees, and the sources of additional boosted returns, while sharing practical examples to illustrate potential outcomes.

Key Takeaways

Dual Investment vaults let users earn fixed yield by choosing to “Buy Low” or “Sell High” with USDC or tokens like ETH, depending on their market outlook.

Yields are fully collateralised and calculated upfront, ensuring transparency and predictable returns at expiry regardless of whether the target price is hit.

Boosted yields may include additional incentives from governance tokens, protocol partnerships, or liquidity mining programs, enhancing base returns.

Beginner-friendly strategies focus on safer price targets and short-term vaults, especially using stablecoins for reduced exposure.

Advanced traders can implement structured options-style strategies such as collars, spreads, or straddles, enabling hedged positions and risk-optimised yield.

Understanding ProdigyFi Dual Investment Vaults

Prodigy.Fi’s Dual Currency Investment (DCI) vaults are smart contracts that allow users to deposit a token (eg, USDC or ETH) to either buy an asset at a lower linked price (“Buy Low”) or sell at a higher linked price (“Sell High”) on a specific expiry date.

While waiting for the linked price to be reached, users earn fixed, fully collateralised yields, regardless of market movements. These vaults are curated by vault creators who deposit the necessary liquidity to cover both potential outcomes: the linked price being reached or not. This ensures the vaults are secure and fully backed, mitigating counterparty risk.

How Yields Are Generated

Yields in Prodigy.Fi’s DCI vaults are fixed, meaning they are predetermined by the vault creator and not subject to market fluctuations during the vault’s lifecycle. The yield, expressed as a percentage, is earned on the user’s deposited amount and paid out at expiry, alongside the principal or swapped asset, depending on the outcome.

The Annualised Percentage Yield (APY) is calculated using the formula:

APY = Yield / (Expiry Date — Today) * 365
For example, if a vault offers a 10% yield over 30 days, the APY is:

APY = 10% / 30 * 365 = 121.67%
This formula annualises the return, assuming the yield is consistently reinvested over a year.

Rewards are calculated as:

Rewards = Subscription Amount * Yield

For a 1,000 USDC deposit in a Buy Low ETH-USDC vault with a 10% yield, the reward is $100 USDC (or equivalent ETH if the linked price is reached). The total payout depends on the vault’s direction and outcome:

Buy Low (ETH-USDC):

• Deposit USDC. If the linked price is reached, receive ETH at the linked price plus rewards: Subscription Amount * (1 + Yield) / Linked Price in ETH.
• If it is not reached, keep the USDC principal plus rewards: Subscription Amount * (1 + Yield) in USDC.

Sell High (ETH-USDC):

• Deposit ETH. If the linked price is reached, receive USDC at the linked price plus rewards: Subscription Amount * (1 + Yield) * Linked Price in USDC.
• If it is not reached, keep ETH principal plus rewards: Subscription Amount * (1 + Yield) in ETH.

What Makes Yields “Boosted”?

While the base yield is set by the vault creator, “boosted” yields refer to additional returns sourced beyond the vault creator’s contribution. These can include:

• Proof of Liquidity (PoL): If integrated, PoL could incentivise liquidity provision with token rewards, boosting yields for vault subscribers.
• Token rewards: Post-Token Generation Event (TGE), Prodigy.Fi may distribute governance tokens to vault participants, enhancing returns.
• Protocol Incentives: Strategic partnerships or platform-level rewards could further amplify yields, aligning with Prodigy.Fi’s mission to maximise user returns.

These boosted components are designed to reward active participation, making Prodigy.Fi’s DCI vaults more lucrative than centralised solutions.

Strategies for Beginners

For newcomers to DeFi, Prodigy.Fi’s DCI vaults offer a user-friendly way to earn passive income while learning market dynamics. These strategies are perfect for users like Brodigy Sally, a more risk-averse investor who prefers stability, steady returns, and minimal active management. She’s here to make her ETH work for her without having to watch the market 24/7.

If you are like Brodigy Sally, here are some beginner-friendly guides that you can follow to get started.

Choose Vaults with Safer Price Targets

Select vaults with linked prices further away from the current market price to reduce the likelihood of achieving your target while earning yields.

For example, in a ETH-USDC Buy Low vault, if ETH is trading at $2,500, instead of picking a vault with a linked price of $2,400, pick a vault with a linked price of $1,800 to reduce the likelihood of getting swapped. This conservative target balances potential price execution with yield generation.

Focus on Buy Low Vaults

Deposit stablecoins like USDC into Buy Low vaults to minimise volatility risk. Buy Low vaults with safe linked prices are ideal for beginners, as they preserve principal value (USDC price remains stable at $1), while earning yields.

Start with Short-Term Vaults

Opt for vaults with shorter expiry dates to reduce exposure to market fluctuations and quickly reinvest earnings. This also helps beginners understand vault mechanics before committing to vaults with longer terms.

Strategies for Advanced Traders

Experienced traders can leverage Prodigy.Fi’s DCI vaults to implement sophisticated strategies inspired by traditional finance (TradFi) options-selling techniques. These strategies are ideal for users like Brodigy Bob, an active, risk-tolerant investor who thrives on market volatility, runs multiple positions, and looks for opportunities to optimise returns through layered strategies. By combining Buy Low and Sell High vaults, traders like Brodigy Bob can optimise yields, hedge risks, and capitalise on market insights.

To keep things simple, we will be using ETH-USDC for all the examples listed below.

1. Collar (Create Buy Low + subscribe Sell High Strategy)

Combine a Sell High subscription with creating a Buy Low vault for the same expiry. Subscribe to a Sell High vault with ETH to earn yield while capping upside, and create a Buy Low vault with ETH to hedge the downside of holding ETH in the Sell High vault by potentially receiving USDC if ETH falls beyond a certain price point.

Strategy:

• Subscribe to a Sell High ETH-USDC vault with a linked price 10–20% above the current price to earn yield.
• Create a Buy Low ETH-USDC vault with a linked price 10–20% below the current price. Alternatively, they can choose to buy Put options on centralised exchanges such as Deribit or Binance.
• Allocate capital (eg, 50% ETH to subscription, 50% ETH to vault creation) for balanced exposure.
• Choose vaults with similar expiries and yields for consistency.
• Pros can adjust linked prices based on their own analysis of the market direction.

Best For: Traders seeking hedged exposure with limited downside. Beginners can use equal allocations; pros can optimise linked prices for bearish bias.

2. Short Straddle (DCI Subscription + Vault Creation Strategy)

Combine Buy Low and Sell High subscriptions with creating a Sell High vault to hedge against a volatile market. Subscribe to Buy Low and Sell High vaults with similar linked prices to earn yields if the price is kept within range, and create a Sell High vault to potentially receive ETH if price rises. If ETH price rises by a lot, the sell high vault protects the creator’s upside of ETH.

Strategy:

• Subscribe to a Buy Low ETH-USDC vault (linked price 5–10% below) and a Sell High ETH-USDC vault (linked price 5–10% above) for the same expiry date.
• Create a Sell High ETH-USDC vault with a linked price 15–20% above to hedge upside risk. Alternatively, they can choose to buy call options on centralised exchanges such as Deribit or Binance.
• Allocate capital (eg, 40% USDC to Buy Low, 40% ETH to Sell High, 20% USDC to vault creation).
• Use short-term expiries to minimise volatility exposure.
• Pros can time entries using low-volatility indicators such as Bollinger Bands.

Best For: Traders expecting low volatility (subscribe within range), hedged against upside spikes (create sell high vault). Advanced traders can choose to use tight ranges or optimise for stable markets.

3. Bear Call Spread (DCI Subscription + Vault Creation Strategy)

Combine a Sell High subscription with creating a Sell High vault. Subscribe to a Sell High vault with a lower linked price to earn yield, and create a Sell High vault with a higher linked price (offer a lower yield than previous subscription since its a safer linked price), to hedge by potentially receiving ETH if prices surge.

Strategy:

• Subscribe to a Sell High ETH-USDC vault with a linked price 5–10% above the current price.
• Create a Sell High ETH-USDC vault with a linked price 15–25% above, setting a subscriber yield lower than the previous vault you subscribed to in the first step. Alternatively, they can choose to buy call options on centralised exchanges such as Deribit or Binance
• Allocate capital (eg, 70% ETH to subscription, 30% USDC to vault creation) to prioritise yield.
• Choose vaults with the same expiry dates.
• Pros can target linked prices based on bearish signals.

Best For: Bearish or neutral traders seeking income with capped upside risk. Safer traders can use wider spreads. More advanced traders can optimise linked prices.

4. Bull Put Spread (DCI Subscription + Vault Creation Strategy)

Combine a Buy Low subscription with creating a Buy Low vault. Subscribe to a Buy Low vault with a higher linked price to earn yield, and create a Buy Low vault with a lower linked price (and offer a lower yield) to hedge downside by potentially receiving USDC if ETH falls significantly.

Strategy:

• Subscribe to a Buy Low ETH-USDC vault with a linked price 5–10% below the current price to earn yield.
• Create a Buy Low ETH-USDC vault with a linked price 15–25% below with a lower yield to earn a spread. Alternatively, they can choose to buy put options on centralised exchanges such as Deribit or Binance.
• Allocate capital (eg, 70% USDC to subscription, 30% ETH to vault creation) to prioritise yield.
• Choose vaults with the same expiry dates.
• Pros can target linked prices based on bullish signals.

Best For: Bullish or neutral traders seeking income with limited downside risk. Safer traders can use wider spreads. More advanced traders can optimise linked prices for bullish trends.

ProdigyFi’s DCI vaults are not just another DeFi yield product, they are a modular, flexible tool for any market environment. Whether you are a cautious beginner like Brodigy Sally looking for stable yield or an advanced trader like Brodigy Bob implementing structured strategies, DCI vaults give you the power to define your risk, target your market view, and get rewarded for it.

With fixed, fully collateralised returns and the potential for boosted yields, these vaults bring TradFi-inspired mechanics into the onchain world but with fewer barriers and more autonomy. As DeFi matures, strategies like the ones covered in this guide will become essential for users looking to move beyond passive HODLing and into active, yield-driven participation.

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