Perpetual Funding

Harvest funding rates across multiple perpetual markets.

Strategy Overview

Metric	Value
Current APY	26.8%
Risk Level	Medium
Min Deposit	0.5 ETH
Chain	Multi-Chain
TVL	$2.0K
Depositors	5
Performance Fee	20%
Management Fee	2%

Key Details

Parameter	Value
Capacity Used	14%
Lock Period	None
Inception Date	Mar 10, 2024
Category	Neutral

How It Works

This advanced strategy systematically harvests funding rates across multiple perpetual futures markets. By taking strategic positions based on funding rate imbalances, the strategy generates consistent returns while maintaining market neutrality. The system monitors funding rates 24/7 and automatically adjusts positions to capture the highest rates.

Understanding Funding Rates

Perpetual futures are derivatives that never expire. To keep their price aligned with spot markets, exchanges use a mechanism called "funding rates."

When perpetual price > spot price:

• Longs pay shorts

• Positive funding rate

When perpetual price < spot price:

• Shorts pay longs

• Negative funding rate

The Strategy

1. Analyze Funding Rates - Monitor rates across assets and exchanges

2. Take Positions - Open positions to receive funding payments

3. Hedge Exposure - Neutralize directional risk with offsetting positions

4. Collect Funding - Receive payments every 8 hours (on most exchanges)

5. Rebalance - Adjust positions as rates change

Example Trade

Scenario: ETH perpetual funding rate is +0.03% per 8 hours

1. Short ETH perpetual (receive funding)

2. Long ETH spot (hedge price exposure)

3. Net position: Market neutral

4. Collect: ~0.03% every 8 hours = ~32% APY

Protocol Allocation

Protocol	Allocation	Purpose
GMX	40%	Primary perps venue
Gains Network	35%	Secondary perps
Kwenta	25%	Synthetix perps

Historical Performance

APY Trends (Weekly)

Date	APY
Oct 29	24.8%
Nov 5	26.5%
Nov 12	27.2%
Nov 19	26.8%

Performance Context

High-Yield Conditions:

• Strong trending markets (either direction)

• High retail participation

• Elevated speculation levels

Lower-Yield Conditions:

• Sideways, choppy markets

• Low volatility periods

• Reduced trading activity

Smart Contracts

Contract	Address
Vault Contract	0x4567...89ab
Strategy Contract	0xdef0...1234

Risk Factors

Medium Risk This strategy involves more complexity than others. While positions are hedged, funding rate dynamics can be unpredictable.

Funding Rate Reversal

Rates can flip negative, causing losses instead of gains. Mitigation:

• Active monitoring of rate trends

• Quick position adjustments

• Diversification across assets and venues

Exchange/Protocol Risk

Positions require decentralized perpetual protocols. We manage this by:

• Multi-protocol deployment (GMX, Gains, Kwenta)

• Position limits per protocol

• Regular profit extraction

Execution Risk

Rapid rate changes can occur. Safeguards:

• Automated position management

• Slippage controls

• Conservative sizing

Liquidation Risk

Leveraged positions carry liquidation risk. Protection:

• Low leverage ratios

• Adequate margin buffers

• Auto-deleveraging triggers

Fees

Performance Fee: 20%

Higher than other strategies due to active management complexity.

Management Fee: 2% Annual

Covers operational costs, monitoring infrastructure, and position management.

The displayed APY of 26.8% is net of all fees. What you see is what you earn.

Funding Rate Dynamics

Why Funding Rates Exist

Funding rates reflect market sentiment:

• Bull markets - More longs than shorts, positive funding, shorts get paid

• Bear markets - More shorts than longs, negative funding, longs get paid

• Neutral markets - Rates fluctuate around zero

Historical Patterns

Historically, funding rates have been:

• Predominantly positive during bull markets

• Variable but often elevated during high volatility

• Lower during extended bear markets

Who Should Consider This Strategy

Ideal for:

• Experienced DeFi users comfortable with complexity

• Investors seeking higher returns with managed risk

• Those who understand perpetual futures mechanics

• Investors with higher risk tolerance

May not suit:

• Conservative investors

• Those unfamiliar with derivatives

• Investors needing guaranteed stable returns

Getting Started

1. Visit the Perpetual Funding strategy page

2. Click "Connect Wallet"

3. Enter deposit amount (minimum 0.5 ETH)

4. Review current funding rates and projected APY

5. Click "Deposit" and approve transaction

6. Monitor funding capture in your dashboard

FAQ

Why is the APY so high?

Funding rates can be lucrative during trending markets when there's imbalance between longs and shorts. The strategy actively captures these payments while hedging price exposure. Higher complexity = higher potential returns.

What happens during a market crash?

The strategy is market-neutral through hedging. During a crash, funding rates often flip negative (shorts pay longs), which could temporarily reduce or reverse returns. The system adjusts positions accordingly.

Can I withdraw anytime?

Yes! No lock-up periods. Withdrawals typically process within 10-15 minutes as positions are unwound across protocols.

Why the higher fees?

This strategy requires 24/7 monitoring, frequent rebalancing, and multi-protocol management. The higher fees reflect the operational complexity compared to simpler strategies.

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