How it works: Drag = Net Senior Claims (Debt + Preferred − Cash) ÷ (Total BTC × BTC Price).
Fiat-denominated claims (USD, JPY, EUR, GBP) compress as BTC rises. The numerator is fixed in fiat while BTC price rises.
BTC-indexed claims (e.g. Capital B OCAs) carry fixed BTC-denominated drag that does not compress with price alone. Instead, drag drops in discrete steps as rising stock price triggers forced conversion of each OCA tranche at 130% of its exercise price.
Collateral-backed claims carry liquidation triggers below a maintenance ratio.
Read the CEBE framework →