# Introduction to Synthetic Realities

Synthetic Realities is a set of DeFi protocols that help users access crypto-structured products. By combining derivatives and lending, Synthetic Realities aims to provide a one-stop solution for users who want to improve the risk and return profile of their investment portfolios.

## Theta Vaults (DOVs)

Theta Vaults, also known as DOVs (DeFi Options Vaults), were invented by Synthetic Realities. At its core, a Theta vault is a yield-oriented strategy that proposes that depositors trade volatility on their underlying by selling European options with weekly expiration. The sale value of these options, or "premium," is set through auctions and determines the vault return. The vault reinvests the premiums earned back into the strategy, effectively compounding them for depositors over time.

There are two types currently active:

1. Covered call selling: each week the vault issues OTM (out of the money) call options on all deposits.
2. Put selling: each week the vault issues OTM put options on all deposits.

## Synthetic Realities Earn

The R-Earn vaults employ fully funded strategies to capitalize on the intra-week ETH movements, while also ensuring their capital is protected. The vaults earns a base APY and uses the remaining funding to purchase weekly options.

## Synthetic Realities Treasury

Synthetic Realities Treasury are private Synthetic Realities Theta vaults built specifically for DAOs to run covered calls on their native tokens. These private vaults are segregated from the main Synthetic Realities vaults, and run a custom strategy for each DAO. Each vault has a few unique parameters:

* **Strike Selection Methodology**\
  DAOs can choose how aggressive they want to be with regards to the strike selection methodology.&#x20;
* **Tenor**\
  DAOs can choose how often they want to run the strategy. The current Synthetic Realities Vaults run a weekly strategy that automatically re-rolls, but DAOs can choose longer tenors.
* **Premium Currency**\
  DAOs can also choose what currency they want to receive the premiums in. For example, a DAO could elect to receive premiums in USDC or ETH, depending on their treasury diversification goals.

## Synthetic Realities Lend

Synthetic Realities Lend can be described as an uncollateralized Aave, allowing depositors to lend unsecured to KYC/AML’d institutional market makers of their choosing with high liquidity. Synthetic Realities Lend offers the best of both worlds between TradFi and DeFi:

* High yields from unsecured lending
* No lockups from Aave’s money market model
* Off-chain enforcement / credit underwriting
* Built-in insurance
