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Understanding Minting & Redeeming
Minting and Redeeming are important features on AlphaX. These features allow you to mint a pair of LONG and SHORT strike tokens by trading it in with USDC.e or redeem a pair of LONG and SHORT strike tokens into USDC.e.

⚠️ Important Notices

  1. 1.
    In order to mint/redeem, the pair has to be the same type of Strike Token.
    • For instance, 1 LONG ETH Strike Token and 1 SHORT ETH Strike Token can be minted and redeemed together.
    • NOT 1 LONG AVAX Strike Token and 1 SHORT ETH Strike Token.
  2. 2.
    To mint/redeem fully, both Strike Tokens have to be valued equally.
  3. 3.
    You must always mint/redeem opposite Strike Token, eg. LONG and SHORT not LONG and LONG or SHORT and SHORT
Down below are ways you mint and redeem Strike Tokens, especially when you try to arbitrage the difference between the Oracle and the Market price.

Minting

Minting is an action of exchanging USDC for a pair of LONG and SHORT Strike Tokens. This is different from trading it from the Market page. Through Minting, those pairs of Strike Tokens are newly created. The reason why the AlphaX minting process produces an equal value of LONG and SHORT Strike Token is to maintain the equilibrium of the asset’s Strike Token in the market. For instance, if AVAX’s price increases the LONG-AVAX-Strike Token will make a profit while SHORT AVAX Strike Token will make a loss. By combining both profits and losses, the net change is zero. Hence, if there is more LONG or SHORT strike token of AVAX in the market, then the net change will not be zero, disrupting the equilibrium.
Learn how to mint by clicking here.
⚠️ NOTE: Strike Tokens can be liquidated when the asset price gets closer to the price floor/ceiling. For more information on liquidation risks, check here.

Redeeming

Redeeming is an action of exchanging a pair of LONG and SHORT Strike Tokens for USDC. This is different from trading it from the Market page. Through Redeeming, those pairs of Strike Tokens are destroyed and allow users to claim the underlying USDC. The reason why the AlphaX redeeming process destroys an equal value of LONG and SHORT Strike Token is to maintain the equilibrium of the asset’s Strike Token in the market. For instance, if AVAX’s price increases the LONG-AVAX-Strike Token will make a profit while SHORT AVAX Strike Token will make a loss. By combining both profits and losses, the net change is zero. Hence, if there is more LONG or SHORT strike token of AVAX in the market, then the net change will not be zero, disrupting the equilibrium.
Learn how to redeem by clicking here.
⚠️ NOTE: Strike Tokens can be liquidated when the asset price gets closer to the price floor/ceiling. For more information on liquidation risks, check here.
Last modified 1mo ago
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