Why Do the Markets Need Stable Jack?

Today, the yield and volatility markets suffer from problems that prevent these markets from expanding.

Accessibility to yield products: Most retail users can't access yield products apart from those offered by TradFi institutions which are quite limited, mainly T-bills. Yield products are only denominated in USD, or local currencies. Users can't access yield products denominated in cryptocurrencies, commodities, or stocks.

Lack of superior yields: In order to make DeFi attractive for institutions, and retail users, the yields should be increased. T-bill yields or interest rates on lending markets are not high enough for retail users to prefer such products. It is also not high enough for institutions to prefer DeFi over TradFi from a risk perspective.

Risk of losing principal: Currently, users have to give up on their principal if they want to be exposed to yield products. This is a risky decision for users and creates a PvP environment for yield and volatility traders.

Duration mismatch problem: In TradFi, the price of a future contract of an asset can diverge from its spot underlying, causing problems for investors. This might make such products risky and unattractive for investors.

Derivative markets in TradFi has reached to $600T, while the interest rate derivatives has reached to $400T. This shows that in TradFi, there is a significant demand for products similar to what Stable Jack offers. On the other hand, the tokenization market is expected to reach $10T in 2030.

Compared to TradFi, yield and volatility markets in DeFi are quite small. The value stands out at $11B, and Pendle comprises more than 50% of this market. The tokenization market stands at $4B, which is quite lower than the expectations.

This shows that there is a potential market with significant upside potential for Stable Jack as it offers a new yield and volatility product that is not available in the market.