Yield Strategies
Stabolut generates real yield through delta-neutral hedging strategies. This approach allows the protocol to maintain a stable $1 peg for USB while capturing revenue from the derivatives market.
Delta-Neutral Hedging
The core strategy involves holding collateral assets (such as BTC, ETH, or liquid stablecoins) and opening corresponding short positions in perpetual futures markets.
How It Works
- Collateralization: Users mint USB by depositing assets (e.g., ETH).
- Hedging: The protocol takes the deposited asset and opens a 1x short position on a derivatives exchange.
- If ETH price drops, the short position gains value, offsetting the loss in the collateral value.
- If ETH price rises, the short position loses value, but the collateral gains value.
- Result: The total value of the position remains stable in USD terms, backing the USB peg.
Sources of Yield
The yield distributed to Stabolut participants comes from three primary sources:
1. Funding Rates
In crypto perpetual markets, long position holders typically pay short position holders to keep the contract price aligned with the spot price. Since Stabolut holds short positions, it earns these funding payments.
- Bull Market: Funding rates are typically positive, generating significant yield.
- Bear Market: Strategies are adjusted to minimize costs or capitalize on specific inefficiencies.
2. Basis Arbitrage
The protocol capitalizes on the difference (basis) between the spot price of an asset and its futures price. By capturing this spread, Stabolut generates additional low-risk returns.
3. Execution Efficiencies
Stabolut utilizes advanced execution algorithms to minimize slippage and fees when opening or closing positions. Additionally, the protocol may earn maker rebates from exchanges for providing liquidity.
These strategies are "Delta-Neutral" because they are designed to be indifferent to the price movements of the underlying collateral assets. The goal is capital preservation and yield generation, not directional speculation.
Historical Performance
The following data illustrates the historical performance of the ETH/USDT delta-neutral strategy over a 24-month period.
Summary Statistics
| Metric | Value |
|---|---|
| Strategy Pair | ETHUSDT |
| Date Range | 2023-10-01 to 2025-10-31 |
| Avg Monthly Yield | 1.17% |
| Total Yield | 29.39% |
| Worst Consecutive Period | 9 days (2025-04-07 to 2025-04-15) |
Monthly Breakdown
| Month | Monthly Yield | Cumulative Yield | Funding Collected | Accumulated |
|---|---|---|---|---|
| 2023-10 | 0.43% | 0.43% | $43.27 | $43.27 |
| 2023-11 | 1.13% | 1.56% | $112.90 | $156.17 |
| 2023-12 | 2.34% | 3.90% | $234.14 | $390.31 |
| 2024-01 | 1.27% | 5.18% | $127.38 | $517.69 |
| 2024-02 | 1.58% | 6.76% | $158.47 | $676.16 |
| 2024-03 | 5.22% | 11.98% | $521.63 | $1197.79 |
| 2024-04 | 1.44% | 13.42% | $143.91 | $1341.70 |
| 2024-05 | 1.25% | 14.67% | $125.44 | $1467.14 |
| 2024-06 | 0.74% | 15.41% | $73.74 | $1540.88 |
| 2024-07 | 0.90% | 16.31% | $90.12 | $1631.00 |
| 2024-08 | 0.73% | 17.04% | $73.14 | $1704.14 |
| 2024-09 | 0.59% | 17.64% | $59.42 | $1763.56 |
| 2024-10 | 0.83% | 18.47% | $83.50 | $1847.06 |
| 2024-11 | 1.50% | 19.97% | $150.38 | $1997.44 |
| 2024-12 | 1.86% | 21.84% | $186.45 | $2183.89 |
| 2025-01 | 0.93% | 22.77% | $93.00 | $2276.89 |
| 2025-02 | 1.21% | 23.98% | $121.12 | $2398.01 |
| 2025-03 | 0.61% | 24.59% | $60.65 | $2458.66 |
| 2025-04 | 0.30% | 24.88% | $29.59 | $2488.25 |
| 2025-05 | 0.90% | 25.78% | $90.00 | $2578.25 |
| 2025-06 | 0.82% | 26.61% | $82.48 | $2660.73 |
| 2025-07 | 0.76% | 27.36% | $75.59 | $2736.32 |
| 2025-08 | 0.93% | 28.29% | $93.00 | $2829.32 |
| 2025-09 | 0.65% | 28.94% | $64.55 | $2893.87 |
| 2025-10 | 0.45% | 29.39% | $45.18 | $2939.05 |