Delta Neutral
Raga Finance’s Delta Neutral Vaults allow users to earn consistent yield without taking directional exposure to price movements. These vaults balance long and short positions to eliminate market risk while generating sustainable returns from funding rates, staking yields, or protocol incentives
How It Works
The delta neutral strategy is designed to stay market-neutral, meaning your returns don’t depend on whether the price of the underlying asset goes up or down.
Here’s how it works in practice:
Long Exposure via DeFi Protocol: The vault opens a long position on an asset (for example, HYPE) through a DeFi protocol or LP exposure. This leg earns the base yield, such as staking rewards or trading fees.
Short Exposure via Perpetuals on Hyperliquid: To hedge the price risk of the long position, the vault simultaneously opens an equal-sized short position on Hyperliquid Perpetuals, managed by Raga’s on-chain strategy manager. This short neutralizes the asset’s price exposure and hence “delta neutral.”
Earning Neutral Yield: Since price risk is neutralized, the yield comes from funding rate differentials, incentives, or protocol yields rather than speculative price changes. In Raga’s case, positions are transparently managed on Hypercore, and anyone can track the backend flow of trades.
Example
Suppose HYPE staking yields 2% APR, and the short position on Hyperliquid pays a 12% funding rate to shorts (positive funding for shorts).
The vault earns 2% from staking and 12% from funding, generating a total of 8% market-neutral yield, regardless of HYPE price movement.
User Benefits
Stable Returns: Earn consistent yield without worrying about market volatility.
Fully On-Chain & Transparent: Positions are managed on Hyperliquid’s on-chain orderbook; users can track the strategy in real time.
Non-Custodial: Users always maintain control over their assets; Raga never takes custody.
One-Click Execution: The complex hedging strategy is abstracted into a simple, single-click experience for users.
Supported Networks
Raga Finance’s first Delta Neutral Vaults will launch on Hyperliquid. But, similar strategy can be launched on any chain with yield bearing token and perp dex depending on how deep liquidity is there.
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