Derivatives
Coming soon
ETHTW, eETHTW, and eeETHTW are listed and transacted via Elevado Markets.
Overview
ETHTW serves as a primary asset for the creation of derivative assets: eETHTW and eeETHTW.
Built on the ERC-20E, eETHTW and eeETHTW extend ETHTW’s framework into a recursive, multi-layer capital structure, enabling deterministic yield amplification while preserving full collateralization and linear ETH exposure.
Each derivative layer is built using the same ERC-20E architecture that governs ETHTW, inheriting its NAV mechanics, monotonic growth properties, deterministic accounting, and structural solvency guarantees.
Learn more:
Structural Design
Each derivative layer is deployed as a distinct ERC-20E contract, with minting enabled through deposits of the underlying asset at a predefined initial ratio.
eETHTW – an ETHTW first-order derivative – is minted by depositing ETHTW.
eeETHTW – an ETHTW second-order derivative – is minted by depositing eETHTW.
Each derivative contract maintains:
Its own reserve pool (denominated in the underlying layer asset)
Its own supply
Its own deterministic NAV
Initial Ratio
eETHTW and eeETHTW are each initialized at a 1:1 ratio relative to their respective underlying assets.
Specifically, 1 eETHTW is issued against 1 ETHTW, and 1 eeETHTW is issued against 1 eETHTW at inception. Accordingly, the initial NAV of eETHTW is defined as 1 ETHTW per token, and the initial NAV of eeETHTW is defined as 1 eETHTW per token at deployment.
NAV and Yield Mechanics
Each derivative layer applies the same deterministic NAV formula as ETHTW:
Protocol fees collected on minting and redemption are retained within the derivative’s reserve. As a result:
NAV is monotonically non-decreasing.
Every mint and redemption increases NAV.
Yield is generated endogenously at each layer.
Because derivatives are built on top of a yield-accreting primary asset, they inherit the NAV growth of the underlying layer while also generating additional NAV growth from their own fee retention.
This creates layered deterministic yield.
Economic Rationale
Ethertower's derivatives enable recursive capital deployment without introducing leverage, counterparty exposure, or external dependencies.
The system produces what can be described as a "yield fractal":
ETHTW generates primary endogenous yield.
eETHTW generates secondary yield on top of ETHTW.
eeETHTW generates tertiary yield on top of eETHTW.
Recursive Capital Efficiency
The derivative framework enables progressively higher yield exposure while preserving:
Deterministic NAV mechanics
Structural insolvency protection
Full collateral backing
Oracle-free valuation
Participants may choose their position in the hierarchy depending on desired yield intensity and interaction frequency.
Higher-order derivatives accumulate NAV growth from:
Underlying layer NAV accretion
Their own layer’s protocol fee retention
This recursive structure allows capital to become increasingly productive while remaining within a fully collateralized, mathematically enforced reserve system.
System Properties
Ethertower's derivatives inherit all structural guarantees of ETHTW:
Fully collateralized at every layer
Monotonically increasing NAV
Deterministic and oracle-free valuation
Endogenous yield
Immutable and governance-free logic
Fully permissionless interaction
The result is a scalable, multi-layer ETH-denominated reserve architecture capable of supporting recursive yield generation without compromising decentralization or structural integrity.
Minting and Redemption Flow
Minting occurs recursively across layers:
ETH → ETHTW
ETHTW → eETHTW
eETHTW → eeETHTW
Each derivative layer is minted by depositing the underlying asset into its respective contract at the prevailing NAV, subject to protocol-defined fees.
Redemptions unwind symmetrically:
eeETHTW → eETHTW
eETHTW → ETHTW
ETHTW → ETH
Solvency invariants are preserved independently at each layer, maintaining full collateral backing and deterministic NAV integrity throughout the recursive structure.
Fees
Protocol Pool
100 bps (1.00%)
Issuer
10 bps (0.10%)
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