How it works

Note: You'll need USDC on Arbitrum to execute this strategy. Check out our user guides section for a detailed guide on obtaining USDC and managing your positions.

The Concept

Delta-neutral strategies eliminate directional market risk by taking opposing positions in the same asset. Our platform creates this by simultaneously opening a spot position and a perpetual futures position of equal size but opposite direction. When the asset's price moves in either direction, gains in one position offset losses in the other. This market-neutral setup allows you to capture perpetual futures funding rates as yield, regardless of the underlying asset's price movements.

Core Mechanics

Our platform automates the entire position creation process through simultaneous interactions with Arbitrum and Hyperliquid protocols:

1. Position Sizing

   • Calculates optimal position distribution based on input amount and leverage

   • Determines spot-to-futures ratio to maintain delta neutrality

2. Spot Position

   • Aggregates liquidity across multiple sources for optimal swap execution

   • Implements dynamic slippage optimization for efficient asset acquisition

3. Futures Position

   • Bridges required USDC amount to Hyperliquid

   • Configures leverage parameters

   • Opens precisely-sized short position with adaptive slippage controls

Yield Generation

The established position generates yield through Hyperliquid's perpetual futures funding rates. Your spot position maintains the asset exposure while the corresponding short position on Hyperliquid acts as the hedge. The leverage ratio directly impacts potential yields - higher leverage can amplify funding rate returns but also increases position risk.

The platform continuously tracks funding rates and position status, allowing you to monitor and adjust your strategy based on market conditions.

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