# Welcome to Fig

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Not all investors are eligible to participate in Fig's yield protocol. Please see [Permitted Investors](https://docs.fig.fi/resources-and-legal/permitted-investors), and [Permitted Jurisdictions](https://docs.fig.fi/resources-and-legal/permitted-jurisdictions) on who may be eligible to participate in Fig's pools. 
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## Problem

**Crypto has a persistent yield problem.** 

Over the past 10 years, on-chain crypto wealth has grown exponentially. There are estimates of $150+ billion crypto assets looking for yield. These assets have been accumulated over years by crypto natives and will continue to stay on-chain. As wealth grows, generating income on idle assets is top of mind.

Despite various attempts, yield on crypto assets remains low or unsustainable.

Protocols like [Ethena](https://ethena.fi) have emerged, tokenizing perps funding to meet defi's demand for yield. However, cefi perps market for ETH is close to $15 billion at the moment, which is not enough to satisfy yield on $150 billion of on-chain assets. 

That is where Fig comes in.

## Overview

**Fig is a yield protocol using options.** 

Through hybrid on and off chain mechanisms, Fig generates yield on crypto assets through delta neutral option selling (writing) by matching on-chain LP collateral with non-toxic option buy flow through traditional exchanges such as CBOE and CME. A spot exposure to BTC proxied via ETF is delta hedged with a short BTC futures and 15-30 delta call, creating a portfolio that:

1. Collects premium from weekly managed BTC spot ETF option selling
2. Current contango exhibited in the BTC futures. 

The LP positions are tokenized as Fig yield tokens `figUSD`. Since it represents a net USD value of the collateral assets, it is a fungible token that maybe traded on an automated-market-maker (AMM). 

Currently the yield generation strategy is managed by Volatility Research LLC, with steps towards [progressive decentralization](https://a16zcrypto.com/posts/article/progressive-decentralization-crypto-product-management/). See [Yield Mechanism](https://docs.fig.fi/protocol-mechanics/yield-mechanism) for details. 

## How Can I Use Fig

You can:

* Upon approval for KYC and onboarding, deposit USDC or USDT into collateral pool in exchange for Fig yield token and track accrued yield and return. 
* Mint and burn yield tokens direct via Fig's on-chain protocol, available to KYCed and AML-screened counterparties
* Stake yield token, figUSD, and earn points