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hyETH Presale FAQs

Everything you need to know about product revenue tokens for hyETH

What is hyETH?

The Index Coop High Yield ETH Index (hyETH) tracks the performance of the largest high-yield opportunities for ETH on Ethereum main net. The index weights all eligible strategies equally and rebalances monthly to include the most current, relevant ETH yield strategies. A strategy must be listed on DeFi Llama to be eligible and have a yield of at least 4.00% higher than the staking rate defined by dsETH’s 30d APY, which is currently 3.47%. As of 3/28, strategies must have an APY of at least 7.47%.

The current composition as of 3/28 includes positions from Pendle, Instadapp, and Across and would yield 31.22%.

What is the Purpose of the Presale?

The presale process enables customers and early adopters to demonstrate tangible demand for a proposed product by depositing funds into the token before launch. Each presale will have a pre-defined deposit threshold (ex. 500 wstETH) that must be met within a specified amount of time (ex. 30 days) to determine whether or not the product is formally launched. 

If a presale meets or exceeds this threshold in the allotted time, Index Coop will launch the Product. If it does not meet the agreed-upon threshold, the product will not be launched, and depositors may withdraw their funds.

Presale participants may withdraw their funds at any time during the presale as well, though early withdrawals forfeit eligibility for PRT incentives in the event the presale is successful.

What are Product Revenue Tokens?

Presale supporters will be incentivized with an innovative mechanism called Product Revenue Tokens (PRTs). PRTs offer presale participants the opportunity to share the product’s revenue after it is launched. For example, if you own 10% of all PRTs for hyETH, you will be entitled to 10% of all future revenue generated by hyETH. A fixed supply of PRTs (ex. 10,000 units) will be made available to presale participants 30 days after hyETH officially launches.

PRT holders must stake their PRTs to receive their share of product fees. PRT staking will be comprehensively restricted and not be available to Restricted Persons (including US Persons) as defined here. More information on PRT distribution and staking will be published closer to hyETH launch (assuming a successful presale).

Unstaked PRTs may be freely traded on secondary markets.

What are the eligibility criteria for PRTs?

To earn PRTs, you must participate in the hyETH presale by depositing wstETH via the Index Coop app. You must maintain your deposit until the end of the post-launch period, at which point PRTs will be distributed and may be staked to receive product revenue. For hyETH, stages have the following lengths:

  • Presale Period: 30 days
  • Pre-launch Period: 30 days
  • Post-launch Period: 30 days

If you withdraw from hyETH for any reason before the post-launch period is complete, you will not earn any PRTs on withdrawn capital. If a presale is unsuccessful, no PRTs will be distributed as the product will not be launched. More information on PRT distribution will be published closer to hyETH launch (assuming a successful presale).

Who is eligible to stake PRTs?

PRT holders who are not Restricted Persons are eligible for staking their PRTs and receiving a share of product revenue.

More information on PRT distribution and staking will be published closer to hyETH launch (assuming a successful presale).

How Do I Earn PRTs?

To earn PRTs, you may deposit wstETH to the hyETH presale via the Index Coop app. Under the hood, “depositing” to the presale technically issues new units of the pre-launch hyETH product token. If the hyETH presale is successful, the hyETH product token will be rebalanced into the composition of high-yield ETH strategies.

Presale depositors earn PRTs based on the amount and time deposited. For example, a deposit of 10 wstETH on Day 1 of the presale will earn more PRTs than on Day 15.

Every 24 hours, a snapshot captures the balance of hyETH held per address. A fixed number of PRTs will be assigned to each address in proportion to their balance of hyETH. On Day 1, 6.45 PRTs will be distributed. Each following day, the number of PRTs distributed will increase by 6.45. This results in 3,000 PRTs being distributed over the 30-day presale.

The increasing number of PRTs daily ensures that large, late depositors can still earn significant PRTs. However, early depositors will always earn more than late depositors, holding deposit size constant. There is a fixed total supply of 10,000 PRTs. 3,000 (or 30%) are distributed to presale participants, while Index Coop holds 7,000 (or 70%).

How Much is a PRT Worth?

PRTs are claims on future fees generated by hyETH. For example, suppose hyETH has a TVL of $100m and a user holds 500 PRTs. This entitles them to 5% of the revenue generated by hyETH.

hyETH has a streaming fee of 0.95% per year. So, $100m in TVL would generate $950,000 per year in revenue. The user holding 500 staked PRTs would earn $47,500 annually. It is worth noting though, that product TVL can be unpredictable, and revenue is not guaranteed for perpetuity because Index Coop can deprecate unsuccessful products following an $INDEX governance vote.

Another note is that the revenue will be distributed proportionally amongst staked PRTs. For example, if a user holds 500 PRTs but only 5,000 PRTs are currently staked (instead of a 100% staking participation rate), then the user will earn 10% of the fees instead of 5%.

Additionally, PRTs in secondary markets may trade at a multiple of annual revenue or a significant discount to annual revenue. It’s too early to say how much these assets could be worth.

More information on PRT distribution and trading will be published closer to hyETH launch (assuming a successful presale).

What Happens if a Presale Threshold is Met?

The product will move into the pre-launch phase once the presale threshold is reached and the presale period is complete. This pre-launch phase will last 30 days, giving Index Coop time to rebalance the hyETH token into the launch composition, add app support for hyETH, and prepare informational content.

To receive PRTs, you must maintain a deposit until after the post-launch period, at which point hyETH will have been launched and live for 30 days. If you withdraw at any point before the post-launch period ends, you will not receive PRTs on the withdrawn capital.

PRTs will be made available for presale participants after the 30 day post-launch period concludes; PRT staking will also be enabled at this time. More information on PRT distribution and staking will be published closer to hyETH launch (assuming a successful presale).

What Happens if a Presale Threshold is NOT Met?

If hyETH does not hit its threshold at the end of the presale period, the product will not be launched, and PRTs will not be distributed. Presale participants will be free to withdraw their wstETH in exchange for the pre-launch hyETH token, which will be burned. 

Presale participants can always withdraw their assets during the presale and pre-launch periods, though early withdrawals forfeit potential PRT rewards.

How Do I Deposit to the Presale?

To deposit, go to the Index Coop Presale Page. Choose the hyETH presale and deposit wstETH. You’ll receive pre-launch hyETH tokens in the same transaction.

Under the hood, depositing to the presale is like issuing any Index Coop product. wstETH is sent to the hyETH contract, and a new unit of pre-launch hyETH is minted and sent to the depositor. If the presale is successful, participants do not have to do anything to receive the fully-fledged product because the pre-launch composition (i.e. wstETH) will be rebalanced into the launch composition (i.e. ETH yield strategies).

How Do I Withdraw from the Presale?

To earn PRTs, users must retain their position throughout the presale, pre-launch, and post-launch periods. If a user's balance decreases, they forfeit all prior PRTs earned for the decreased amount, and those PRTs will be retroactively redistributed to other hyETH holders. The presale, pre-launch, and post-launch periods are 30 days each. 

That said, withdrawals are always enabled, and there are no early withdrawal fees. Go to the Index Coop Presale Page to withdraw your deposit of wstETH.

What About Partial Withdrawals?

Partial withdrawals forfeit all PRT rewards earned by the amount withdrawn. Deposits that remain and are not withdrawn are still eligible for PRT rewards. For example, if a user’s daily deposit balance looked like this…

Day 1: 0

Day 2: 0

Day 3: 5

Day 4: 3

Day 5: 2

They would earn PRTs based on the following balances:

Day 1: 0

Day 2: 0

Day 3: 2

Day 4: 2

Day 5: 2

In other words, the user forfeits PRTs attributed to the withdrawn assets.

How Do I Track My Rewards?

Presale participants can track their rewards via a dedicated Dune dashboard that will be available as soon as the presale begins.

More information on PRT distribution and staking will be published closer to hyETH launch (assuming a successful presale).

Are early presale participants rewarded more?

Yes, early participants are eligible for more daily rewards than participants who deposit wstETH later in the presale period. However, deposits on Day 30 of the presale are still eligible for PRTs, so there is still a meaningful incentive to participate at the end of the presale.

Do I get a receipt token or something similar in my wallet after depositing?

Yes, you will receive pre-launch hyETH tokens in exchange for your deposit into the presale. If the presale succeeds by meeting its target threshold, the wstETH inside the pre-launch hyETH tokens will be rebalanced into the full launch composition for hyETH; as a result, your hyETH tokens will evolve into the ultimate product. No further action will be required for presale participants who wish to hold hyETH moving forward.

Under the hood, presale “deposits” translate to an issuance transaction for the hyETH pre-launch token. Depositors input wstETH, the sole component of hyETH, and issue new units of the hyETH pre-launch token. Similarly, “withdrawals'' constitute a redemption transaction, where holders burn their hyETH token in exchange for the underlying asset(s); during the presale, the underlying asset will be wstETH, and if the presale is successful, the underlying assets will ultimately reflect the full product composition.

Do I get to keep the yield on my deposit?

Yes, presale participants retain all the yield earned by their wstETH deposits throughout the presale. No fees are charged during the presale, and the streaming fee for hyETH will only be activated once hyETH is formally launched.

What happens if I withdraw before the presale ends?

Presale participants are free to withdraw during the presale period, the pre-launch period, and the post-launch period; however, withdrawing before hyETH has been launched and live for 30 days will result in the forfeiture of PRT incentives.

When will I receive my PRTs?

PRTs will be made available once hyETH has been formally launched and live for 30 days. To remain eligible for PRT rewards, presale participants must maintain their position throughout the 30 day presale, the 30 day pre-launch period, and the 30 day post-launch period.

More information on PRT distribution and trading will be published closer to hyETH launch (assuming a successful presale).

When will the hyETH PRT staking pool be live?

Staking for hyETH PRTs will be enabled at the same time that PRTs are made available to presale participants: at the end of the 30 day post-launch period for hyETH. Non-restricted persons who hold PRTs will be eligible to join the staking pool.

More information on PRT distribution and staking will be published closer to hyETH launch (assuming a successful presale).

Disclaimer: This content is for informational purposes only and is not legal, tax, investment, financial, or other advice. You should not take, or refrain from taking, any action based on any information contained herein, or any other information that we make available at any time, including blog posts, data, articles, links to third-party content, discord content, news feeds, tutorials, tweets, and videos. Before you make any financial, legal, technical, or other decisions, you should seek independent professional advice from a licensed and qualified individual in the area for which such advice would be appropriate. This information is not intended to be comprehensive or address all aspects of Index or its products. There is additional documentation on Index’s website about the functioning of Index Coop, and its ecosystem and community.

You shall not purchase or otherwise acquire our restricted token products if you are: a citizen, resident (tax or otherwise), and/or green card holder, incorporated in, owned or controlled by a person or entity in, located in, or have a registered office or principal place of business in the U.S. (defined as a U.S. person), or if you are a person in any jurisdiction in which such offer, sale, and/or purchase of any of our token products is unlawful, prohibited, or unauthorized (together with U.S. persons, a “Restricted Person”).  The term “Restricted Person” includes, but is not limited to, any natural person residing in, or any firm, company, partnership, trust, corporation, entity, government, state or agency of a state, or any other incorporated or unincorporated body or association, association or partnership (whether or not having separate legal personality) that is established and/or lawfully existing under the laws of, a jurisdiction in which such offer, sale, and/or purchase of any of our token products is unlawful, prohibited, or unauthorized).

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