Snowball with floor Product FAQ

What is a snowball with floor?

The snowball with floor product is essentially a structured product, akin to a fixed-income note. It is often used in connection with stocks, commodities, and other underlying assets and is widely recognized in Europe, Japan, South Korea, and China. The VETA platform mainly uses BTC or ETH as the underlying asset. To put it simply, if you believe that BTC will not fall (e.g., 25%) within the product period, you can earn coupon income.

Who is the snowball suitable for?

The snowball product is suitable for investors who want to receive a fixed coupon income without directly trading cryptocurrencies. According to historical data backtesting, the snowball product has a win rate of over 80%.

How is the return calculated?

In most cases (Scenarios 1 and 2), you will receive the stipulated coupon income. Holding period return = Holding period * Annualized yield. Note that early redemption due to a knock-out event will result in a holding period that is less than the total product period. In Scenario 3, the product will return the full principal.

What is the product term? Will the product end early due to a knock-out?

You will see the product term on the specific product page, such as 28 days, 91 days, and 180 days. Note that if a knock-out event occurs, it means that the product will end early and pay out the principal and interest. (A knock-out event is when the price of the underlying asset on the knock-out observation day exceeds the knock-out price, leading to early redemption of the product) Early redemption will only be triggered when a knock-out event occurs (Scenarios 1 and 2). Investors will receive APR interest based on the annualized term proportion. A knock-in event does not trigger early redemption.

What are the risks of the product?

The snowball product is a conservative financial product. Only in Scenario 4, when a knock-in event occurs without triggering a knock-out, will you incur a loss. In this case, you will bear a loss between the initial benchmark price and the settlement price, and your loss will never exceed the loss caused by directly holding the underlying asset itself. If purchased with a stablecoin in USD, this essentially means that the quantity of BTC will not decrease.

What is a Floor Level?

The floor level is a distinctive parameter of the guaranteed snowball investment strategy, signifying that the maximum potential loss of principal is capped at this predefined level. Investors can reap the benefits of the snowball’s high probability of returns while their exposure to tail risks is minimized.

What is the observation period?

During the lifetime of the product, the observation price of each observation period from 16:00 to 16:00 the next day (UTC+8) is calculated at the beginning of the observation period, which includes the knock-in price and the knock-out price, and it is monitored for any knock-in (knock-out) events.

What are knock-in/knock-out events?

Each observation period after subscribing to the snowball will have a price range consisting of a knock-in price and a knock-out price. It is then monitored to see if the coin price touches or crosses the knock-in price or knock-out price during the observation period. If the coin price touches or crosses the knock-in price, a knock-in event occurs; if the coin price touches or crosses the knock-out price, a knock-out event occurs.

Can I withdraw or redeem during the term?

No, partial or full redemption is not allowed during the term. You can only redeem when the note ends. Remember to click to choose redemption on the product settlement date.