What is Delta-Neutral Hedging?
Delta-neutral hedging is a sophisticated strategy that maintains USDsd’s peg to the US dollar while generating yield. Standard Money’s algorithms automatically execute these trades by holding long positions in crypto assets and equivalent short positions in perpetual futures to create a delta-neutral position.How It Works
The Delta-Neutral Mechanism
1
Crypto Asset Collateral
USDsd is backed by crypto assets like ETH, BTC, and stablecoins held as
collateral
2
Long Position Management
Maintain long positions in the underlying crypto assets to provide
collateral backing
3
Short Futures Hedging
Simultaneously hold equivalent short positions in perpetual futures to hedge
price exposure
4
Funding Rate Collection
Collect positive funding rates from short positions when markets are in
contango
5
Yield Distribution
Revenue from funding rates and staking rewards is distributed to sUSDsd
holders
Key Benefits
Consistent Yield Generation
- Delta Neutral: Price movements in crypto assets are offset by short positions
- Low Risk: Hedged positions eliminate directional market exposure
- Automated: 24/7 operation without manual intervention
- Stable Peg: Maintains 1:1 USD peg through sophisticated hedging
Exchange Integration
Our algorithms are integrated with major exchanges:- Binance: Largest crypto exchange with deep liquidity
- OKX: Advanced derivatives platform
- Bybit: Professional trading infrastructure
Technical Implementation
Algorithm Features
- Real-time Monitoring: Sub-second price tracking across exchanges
- Risk Management: Automated position sizing and stop-loss mechanisms
- Slippage Control: Smart order routing to minimize execution costs
- Liquidity Management: Dynamic allocation based on market conditions
Yield Optimization
- Compound Strategy: Reinvested profits increase future earning potential
- Multi-Asset: Diversified across BTC, ETH, and other major cryptocurrencies
- Market Adaptation: Algorithms adjust to changing market conditions
Risk Considerations
While basis trading is generally lower risk than directional trading, it’s not
risk-free. Market conditions can affect profitability.
Potential Risks
- Exchange Risk: Technical issues or regulatory changes at exchanges
- Liquidity Risk: Temporary inability to execute trades at optimal prices
- Basis Risk: Unfavorable basis movements that reduce profitability
- Execution Risk: Slippage or failed trades due to network congestion
Risk Mitigation
- Multi-Exchange: Diversified across multiple platforms
- Real-time Monitoring: Continuous oversight of all positions
- Automated Stops: Built-in risk management protocols
- Reserve Fund: Protocol maintains reserves for unexpected losses
Performance Metrics
Historical Performance
- Foundation Yield: 3-8% from staking rewards (stable)
- Funding Rate Yield: 8-20% from positive funding rates (variable)
- Peak Performance: Up to 30% during high volatility periods
- Consistency: Stable returns across different market conditions
- Uptime: 99.9% operational availability
Monitoring Tools
- Real-time Dashboard: Track current positions and performance
- Historical Analytics: Review past performance and trends
- Yield Calculator: Estimate potential returns based on current market conditions
Getting Started
To benefit from delta-neutral hedging yields:- Acquire USDsd: Buy USDsd on DEXs or swap USDT/USDC using the app widget
- Stake for sUSDsd: Convert USDsd to sUSDsd to start earning rewards
- Monitor Performance: Track your rewards in the app dashboard
The delta-neutral hedging strategy runs automatically in the background. As a
sUSDsd holder, you simply earn the generated yields from staking rewards and
funding rates without needing to manage positions yourself.