Barrier
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The barrier determines whether a scheduled observation pays a coupon. Only a breach at maturity changes principal settlement from USDG to Stock Tokens.
Definition
The barrier is a price level below s0, expressed in basis points: barrier = s0 × barrierBps / 1e4. The specification default is barrierBps = 6_500, while each series records its own level.
illustrative At a 180.00 strike and a 65% barrier, the barrier price is 117.00. This separate illustration does not use the worked example’s 80% barrier.
Two Roles of the Barrier
The barrier does two different jobs depending on when it is observed.
| Observation | Observed price ≥ barrier | Observed price < barrier |
|---|---|---|
observations[1..last-1] (intermediate) | Coupon paid for that observation. If also ≥ autocall level, series autocalls. | No coupon for that observation. Series continues. No other consequence. |
observations[last] (maturity) | Principal repaid in USDG plus final coupon. Status Matured, cash settlement. | No coupon. Principal repaid in Stock Tokens at s0. Status Matured, physical settlement. |
A breach at an intermediate observation is therefore not a knock-in. It only suspends that observation’s coupon. Knock-in is judged once, at the final observation. This is a discrete (European-style) barrier: prices between observations are irrelevant, including weekend and after-hours prints.
Comparison Operator
fact The comparison is inclusive: price >= barrier holds. Equality at 1e8 precision counts as the barrier holding. Similarly price >= autocall triggers autocall.
Barrier in the App
Read the labelled barrier and autocall levels against the observation markers. The path between observations does not itself trigger a coupon or settlement.
Choosing a Barrier
Lower barriers reduce knock-in probability and reduce the coupon the market will clear at. In traditional single-stock autocallables, barriers of 60% to 70% with coupons of 15% to 30% p.a. are typical for high-volatility names (ETFGI). The protocol does not restrict barrierBps beyond requiring barrierBps < autocallBps; series creators (governance) choose it.
Barrier and Corporate Actions
fact Stock Token feeds already include the ERC-8056 uiMultiplier, which folds splits and reinvested dividends into the quoted price (Robinhood building guide). Because both s0 and every later observation are read from the same feed, the barrier needs no manual adjustment for corporate actions. The protocol never re-applies the multiplier.
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