Investment Scope

1. Providing Liquidity in the Initial Days of High-Yield Pools

This strategy primarily focuses on interest rate splitting platforms such as Pendle and Spectra, but in principle, it can be applied to any new pool. The key aspects of this strategy include pre-selecting stablecoins suitable for investment and actively monitoring the creation of new pools. On the first day, the annualized yield often exceeds 100%, while the first-week annualized return can surpass 50%. To invest at the earliest opportunity, a certain degree of automation is required to track the establishment of new pools.

2. High-Leverage Stablecoin Recursive Lending

This strategy primarily involves three platforms: Contango (aggregator), SummerFi (aggregator), and Euler Strategies (proprietary). The key challenge in this investment method is controlling slippage. Once the investable stablecoins are identified, slippage per transaction and other variables are estimated to determine how long it takes for the yield to offset the slippage, helping to decide the optimal investment size or leverage ratio. This strategy mainly targets yield-bearing stablecoins or short-term incentive mechanisms provided by platforms to achieve arbitrage.

Since these tokens exhibit some price fluctuations, the timing of buying and selling is more crucial than the nominal yield. Additionally, understanding the interest rate curves of lending platforms is essential to avoid extreme scenarios. Ideally, yield monitoring should be implemented to facilitate better position adjustments.

3. Funding Rate Arbitrage

This strategy involves perpetual futures funding rate arbitrage primarily between Binance and Hyperliquid or arbitrage using spot and futures short positions. On one hand, it arbitrages the funding rate; on the other, it locks in price spread opportunities.

To ensure liquidity and minimize slippage, this strategy selects large pools, such as tokens on Hyperliquid with an open interest above $8 million. For example, as shown in the image, MKR’s funding rate on Hyperliquid is 32% annualized, while Binance offers only 11%. With 3x leverage, this can yield over 30% annualized returns. If aiming for higher returns, automation is required for executing trades efficiently.

4. Hedged Perp LP

This strategy mainly involves two platforms: GMX GMs (paired with manual hedging) and Drift HJLP Vaults for passive investment. This is one of our standard investment approaches, where returns fluctuate over time. It serves as a complementary strategy to the ones mentioned above.

1. Stablecoin cross-chain arbitrage

When a stablecoin displays price discrepancy in difference chains, due largely to the 7-day bridging period, we will arbitrage to make a profit.