Underwriting (Earning Yield)

AnchorShield allows liquidity providers to earn premiums by underwriting the risk of stablecoin depegs. When you underwrite, you are acquiring and holding NO Tokens.

The Economics

• To underwrite, you must lock $1.00 of USDC to mint 1 YES token and 1 NO token.
• You then sell the YES token to a hedger for a premium (e.g., $0.05).
• If the market expires safely (no depeg), your NO token can be redeemed for the underlying $1.00 USDC.
• Profit: You put in $1.00, got $0.05 instantly, and got your $1.00 back at the end. Total return: +5%.

Risk Warning: If a sustained depeg DOES occur, the NO token expires worthless. You keep the $0.05 premium, but you lose the $1.00 locked principal.

Idle Yield (DeFindex)

While your USDC is locked in the smart contract waiting for the market to expire, AnchorShield attempts to route it into yield-generating strategies (like DeFindex / Blend) so you earn native DeFi yield on top of the insurance premiums!