Docs & Risk

The short version

• Stock Tokens are tokenised debt securities. They follow a stock’s price. They are not shares.
• Spurs cap your upside. Grafts pay out when the price falls below the strike. You can lose money in both.
• Premium is payment for taking those trades. It is not a rate and it is not promised.
• Prices come from an oracle that can pause or go quiet when market sessions close.
• This is a demo preview. The contracts are not built or audited yet, so this page describes how Espalier is designed to work.

The garden’s words

Espalier borrows its names from the craft of training a tree against a wall.

Cordon

A basket token. One token holds several stocks, such as cMAG7.

Spur

A covered-call vault. You deposit a Stock Token and collect premium. Share token: sNVDA.

Graft

A cash-secured put vault. You deposit USDG and collect premium while you wait to buy lower. Share token: gNVDA.

Gardener

You: anyone who holds a position.

Picker

A market maker who buys the option and pays premium up front.

Harvest

The weekly round: premium is settled and shared out.

Pruning

Rebalancing a Cordon back to its target weights.

Trellis

The frame that holds it up: price oracle, keeper bots, and risk limits.

The Wall

Your portfolio, drawn as a tree.

A week in a vault

Spurs and Grafts run in weekly rounds. One round is one Harvest.

1. The round opens

   Queued deposits join the vault. The strike for the week is set.

2. A Picker pays

   In the first version, a small set of approved Pickers quote a price. The winning Picker pays the premium before anything else happens.

3. The round expires

   Exact expiry and settlement price rules are not final yet. See Still being decided.

4. The vault settles

   The vault compares the settlement price with the strike and pays the Picker only if the option finished in the money.

5. Harvest

   Premium is shared out as claimable USDG. Your Harvest Card shows what was realized, never a projection.

Deposits and withdrawals wait for the next round. Instant withdrawal is only for assets that have not entered a round yet.

Spur Vaults

Deposit a Stock Token such as NVDA. Each round, the vault sells the upside above a strike. A Picker pays you premium for it. Spurs cap your upside. That is the trade.

Settlement is paid in Stock Tokens, so the Picker does not need to send USDG at expiry.

Graft Vaults

Deposit USDG. Each round, the vault agrees to take the loss if a stock ends below a strike. You are paid premium to wait. Graft Vaults are demo only for now.

The vault holds strike × amount in USDG as backing for each round. In this version it settles in USDG and never buys the stock.

Cordons

One token, one basket. cMAG7 holds AAPL, MSFT, GOOGL, AMZN, META, NVDA, and TSLA at equal weight. A Cordon has no premium: you keep the basket’s ups and its downs.

NAV per share = Σ(balance × price) ÷ total shares

Minting

Pay with USDG. The vault buys each Stock Token at market prices and issues shares for the value it actually received. Slippage falls on the person minting, not on existing holders.

Redeeming

In kind: you receive your share of every token, and this is always available. To USDG: only while prices are live.

Pruning

On a schedule, and only while prices are live, the basket trades back to its target weights. Each trade is checked against the oracle price with a slippage limit.

Fees

A management fee and mint and redeem fees. Rates are not set in this preview. Each fee has a maximum written into the contract.

Reading the numbers

Realized APY

The average weekly premium of settled rounds, as a share of what backs the round, times 52. For a Spur that is the tokens’ value at the start of the round. For a Graft it is the strike value held as backing. Simple, without compounding. It looks backward only. It is not a rate and it is not promised.

Strike this week

The price set for the round that is open now. It is per token.

NAV per share

The value of everything a Cordon holds, divided by its shares. It uses oracle prices, so it moves when those prices move.

Token price, not stock price

A Stock Token’s price is the stock’s price times a multiplier. Dividends are reinvested through that multiplier, so the token price drifts above the raw stock price over time. Strikes and premiums are set per token.

Demo labels

In this preview, every figure comes from demo data and is labelled as demo. None of it is a live price.

Risks in full

You can lose some or all of what you put in. These are the ways it can happen.

• Stock Tokens are not shares

  They are tokenised debt securities. They give economic exposure to a stock, not legal rights to the shares and not a vote.

• The issuer matters

  A Stock Token’s value depends on its issuer. The issuer can pause a token or block transfers. A paused token can hold up a vault, which is why a Cordon lets you redeem one component at a time.

• Spurs cap your upside

  If the stock ends above the strike, you give up the gain above it. A Spur still falls with the stock. The premium cushions a drop slightly, nothing more.

• Grafts pay out when the price falls

  If the price ends below the strike, the vault pays out the shortfall from your USDG. You can lose more than the premium you collected.

• Prices pause when sessions close

  Stock Token prices run 24 hours a day, 5 days a week. When a session closes, the feed holds its last price and does not update. After-hours prices can be thin and can differ from the closing price. Actions that need a fresh price are switched off while prices are not live.

• Oracles can be wrong or late

  The design checks every price for age and sanity, and checks that the network’s sequencer is running. Checks reduce the risk. They do not remove it.

• Corporate actions can delay a round

  Splits and dividends change a token’s multiplier. During a large corporate action the price feed may be paused, and rounds may wait until it returns.

• Few Pickers means thin demand

  Early rounds rely on a small set of Pickers. If none quotes a price, that week earns no premium.

• Contracts can have bugs

  These contracts are not built or audited yet. An external audit is planned before real deposits, and early vaults will have deposit caps. Audits lower the chance of a bug. They do not rule it out.

• Entering and leaving costs something

  A Cordon buys its tokens at market prices, so thin markets mean slippage, paid by the person minting. Vault deposits and withdrawals wait for the next round.

• Rules can change

  Options are derivatives, and the rules for them differ by place and can change. Access can be restricted as a result.

• Past rounds do not predict future ones

  A good week says nothing about the next.

Who can use Espalier

Still being decided

These rules are not final. This page will change as they are settled.

Expiry and settlement price

How a round ends when prices run around the clock, and what to do if no price arrives right after expiry.

Strike rule

A fixed distance above the price, or a target based on volatility.

Fee levels

Every fee will have a maximum written into the contract. The rates are not set.

The first Pickers

Who they are and the smallest size they will quote.

How access is checked

Which checks apply, and whether identity verification is needed for the option vaults.