American Options

The original token liquidity mining is a binary system where users receive either (A) No value because there's no rewards. (B) $COIN price at the time of distribution. With the use of physically settled, American style options, organizations can now decide on a range of value to provide recipients.

Definitions

Intrinsic Value: The value received if the option was exercised and the $COIN was sold.

At the Money: An option that has a strike price at the current price of $COIN

In the Money: A CALL option where the strike price is below the current price of $COIN. Or a PUT option where the strike price is above the current price of $COIN. In the Money options have intrinsic value.

Out of the Money: A CALL option where the strike price is above the current price of $COIN. Or a PUT option where the strike price is below the current price of $COIN. Out of the money options have 0 intrinsic value.

Exercise cost: The cost to exercise an option. It is the strike price multiplied by the number of $COIN in the option.

Expiration: The date by which the recipient must exercise, otherwise the organization can claim the $COIN back.

Benefits of Option Liquidity Mining

• Recipients receiving at the money options (ATM) may have no tax obligation, until they exercise and sell their $COIN.

• Organizations can determine on a range of how much intrinsic value to reward recipients with.

• Organizations who write the options receive the exercise cost.

• Organizations can retrieve the $COIN back from options that are not exercised