Trading Strategy
1. Overview
Once collateral is received and verified by Deploy’s custodial infrastructure, it is deployed into on-chain delta-neutral strategies that generate yield through funding-rate differentials in perpetual markets.
These strategies are designed to maintain no net market exposure, ensuring principal protection while allowing the protocol to capture stable, market-neutral returns.
2. Strategy Mechanism
The process can be summarized as follows:
Collateral Deposit
User collateral (BTC, USDT, or equivalents) is transferred to an MPC custodian wallet.
Custodian allocates a portion of the collateral to designated on-chain trading accounts controlled by Deploy’s strategy managers.
Delta-Neutral Setup
The system opens the below positions:
Long in spot markets (holding the underlying asset or synthetic equivalent).
Short in perpetual futures markets on decentralized exchanges such as Hyperliquid or GMX.
This structure neutralizes price volatility while allowing the strategy to earn the funding-rate yields.
Funding-Rate Capture
When the perp funding rate is positive, short positions receive periodic payments from longs.
When the rate is negative, the strategy rebalances or reallocates to other venues to minimize drawdown.
Collateral Rebalancing & Risk Controls
The system maintains strict leverage and margin thresholds.
Automated rebalancing adjusts short/long exposure to preserve neutrality.
3. Core Yield Engine
Deploy’s core engine continuously tracks, analyses, and rebalances strategy allocations using live on-chain and off-chain data feeds:
Market Coverage: Monitors multiple perpetual venues (Hyperliquid, GMX, Drift, Lighter, Aster etc.) across assets such as BTC, HYPE, ETH etc.
Yield Optimization: Dynamically allocates collateral to markets offering the most attractive funding-rate spreads adjusted for liquidity and volatility.
Risk Monitoring: Enforces position size limits, funding-rate sanity checks, and liquidation-margin thresholds.
Execution Transparency: All positions and performance metrics are auditable via on-chain data and periodic custodian reports.
4. Allocation Framework
Strategy Engine
Aggregates market data, evaluates funding-rate trends, and rebalances collateral allocations.
Risk Manager
Ensures total exposure remains neutral and within protocol-defined limits.
Custodian Bridge
Executes approved fund transfers from custody wallets to strategy wallets.
Yield Routing
Profits realized from strategy PnL are periodically transferred to staking vaults (rebased into the same asset).
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