Sharkfin vs holding the coin — across the range
The same principal at settlement. The sharkfin returns principal plus its coupon; holding the coin marks to market. Watch the knock-out row: one tick past the barrier and the boosted coupon collapses to the floor while spot keeps the rally.
| Price move | Sharkfin APR | Sharkfin P&L | Hold coin P&L | Better |
|---|
You are selling the tail to buy the floor
A sharkfin looks like free money — protected principal, headline APR far above a savings account — until you see what you traded away. The boosted coupon is financed by giving up the rally: the further the price runs, the more you would have made holding the coin, and past the knock-out barrier you are handed a floor rate that a stablecoin vault would beat. That is the whole shape of the product, a fin that climbs and then falls off a cliff, and it pays best in exactly the market most people find boring — a gentle drift up that never triggers the barrier. The number that surprises people is the dollar coupon: a 22% boosted APR on a 30-day note is real, but annualized over a month it is a fraction of what a 10% spot move would have earned, so the honest comparison is always against both holding the asset and holding cash at a plain rate. Use it when you genuinely want downside protection and expect calm, not when you are quietly bullish and reaching for yield. Model a two-sided version of the same idea with the dual investment calculator, compare it against writing calls on a coin you own with the covered call calculator, and check the plain-yield alternative with the stablecoin vault risk calculator.
The math
Let the price move at settlement be x (percent from entry) and the knock-out barrier be K. For a bullish sharkfin the coupon rate is the floor f when the price does not rise (x ≤ 0) or when it knocks out (x ≥ K), and in between it ramps linearly from floor to the max M: APR = f + (M − f) · x ÷ K for 0 < x < K. The coupon paid is annualized over the tenor D: coupon = principal · APR ÷ 100 · D ÷ 365, and the principal itself is returned in full, so the note's profit is just the coupon.
Holding the coin instead returns principal · x ÷ 100 — the full mark-to-market move, up or down. The sharkfin beats spot whenever the coupon exceeds that move, which is always true when x is negative (spot loses, the note still pays) and fails once the rally is large enough that spot's gain clears the capped coupon. This model assumes full principal protection, a linear boost ramp and European (settlement-only) knock-out; real products may use continuous barriers, partial protection, or different ramp shapes, and all of them carry platform and counterparty risk plus the opportunity cost of locked capital. Treat the output as the structure's designed payoff, not a promise of the exchange's solvency.