Split

This function enables users to "split" underlying cryptocurrencies into two halves represented by the RiskON & RiskOFF SMART tokens. This process allows users to manage and customize their exposure to cryptocurrency volatility.

Key Functions

  • Deposit Method: This method handles the conversion of underlying tokens into SMART tokens, distributing them to the specified recipient.

    • Parameters:

      1. assets: Amount of the underlying token to be split.

      2. recipient: The receiver of the SMART tokens.

  • Mint Method: This method allows users to mint SMART tokens directly by specifying the number of shares they wish to receive.

    • Parameters:

      1. shares: Amount of SMART tokens to be received.

      2. recipient: The receiver of the SMART tokens.

Process

  1. Approval:

    • Users must first approve the TokenFactory contract to spend their underlying tokens.

  2. Execution:

    • After approval, users can utilize the deposit or mint methods to convert their assets into SMART tokens.

  3. Conversion:

    • The conversion process splits the underlying token into two SMART tokens: RiskOn, which carries a higher risk and potential reward, and RiskOff, which is more stable and protective against downside volatility.

Use Cases

  • The split function is particularly useful for users who want to manage their exposure to crypto volatility. By splitting their holdings, users can choose to hold either the RiskON or RiskOFF tokens based on their risk appetite, enabling more precise control over their investment strategy.

Example Scenario

A user holds 10 units of BTC and wants to split it to manage risk. By using the deposit method, the user splits their tokens into 10 RiskON BTC and 10 RiskOFF BTC tokens. The RiskON tokens allow the user to benefit from leverage, while the RiskOFF tokens provide protection against significant downturns, capping losses at an agreed threshold. It is our expectation that users will split with a view to holding either the RiskON or the RiskOFF token and swapping out of the undesired token.

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