How HedgeLoop Works

Here’s a step-by-step breakdown of how HedgeLoop works

Hedging an NFT or Crypto Asset

• Initiating the Hedge: Users start by selecting the NFT they want to hedge. They specify the amount of SOL( minimum: 0.1Sol ) they wish to deposit as a hedge.

• Hedge Account Creation: For each NFT, a Hedge Account is created on-chain. This account will store:

  • The NFT Mint Address (or other crypto asset details).

  • The Hedged SOL Amount.

  • The Owner's Address (the user who initiated the hedge).

• Depositing SOL: The specified amount of SOL is transferred from the user’s wallet into the protocol’s wallet, where it is held for the duration of the hedge.

• Hedge Lock: You can lock your hedge with your NFT, which means your NFT will be hedged indefinitely but the holder can claim the rewards.

Note: When the NFT is moved to another user the hedge moves with it, which means you are transferring the hedge to the new owner of the NFT.

Increasing the Hedge Amount

• At any time, users can increase the amount of SOL they have hedged against their NFT or asset. This allows for flexibility in adjusting the hedge based on market conditions.

• The protocol tracks each adjustment, ensuring the user’s total hedged amount is accurately recorded and stored on-chain.

Withdrawing the Hedged SOL

• End of Hedge: users can withdraw their hedged SOL whenever they choose. For locked hedges, users can withdraw can only claim yields.

• Partial Withdrawal: users can withdraw part of their hedged amount, depending on the protocol’s rules.

Visit https://hedgeloop.org to view our demo.