> For the complete documentation index, see [llms.txt](https://helios-finance.gitbook.io/helios-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://helios-finance.gitbook.io/helios-finance/capital-efficiency-and-use-cases/delta-neutral-yield-strategies.md).

# Delta-Neutral Yield Strategies

Helios makes it possible to turn idle BTC into an **on-chain, delta-neutral carry trade** that relies solely on decentralized infrastructure—no centralized exchanges, custodians, or CeFi lenders.

***

### Strategy in a Nutshell

1. **Deposit 1 BTC** as collateral.
2. **Borrow a Bitcoin-native stablecoin** (e.g., Taproot-USDT ) worth 0.67 BTC at a 4 % APR—$65 000 with BTC at $97 000.
3. **Margin-short BTC perpetuals** on a decentralized perp DEX using that stablecoin.
4. **Collect funding payments:** when the market is net-long—historically the norm—shorts receive 6-10 % APY in funding fees. ([Funding Rates For Perpetual Swaps - CoinGlass](https://www.coinglass.com/FundingRate?utm_source=chatgpt.com), [GMX | Decentralized Perpetual Exchange](https://gmx.io/?utm_source=chatgpt.com), [Default funding rates on dYdX](https://help.dydx.exchange/en/articles/5108514-understanding-funding-rate-details?utm_source=chatgpt.com), [How Delta-Neutral Trading Works: Funding Rate Approach](https://tradesanta.com/blog/how-delta-neutral-trading-works-mastering-futures-funding-rate-approach?utm_source=chatgpt.com))
5. **Net yield = funding APY – stablecoin borrow APR.** With an 8 % average funding rate, the carry is roughly **4 % on $65 000 ≈ $2 600 per year**, all while remaining price-neutral.

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### Why the Position Is Delta-Neutral

* **Long leg:** 1 BTC locked in Helios.
* **Short leg:** the perp contract equal to 0.67 BTC notional.
* Gains and losses on BTC price mostly offset; only the interest-rate spread matters.
* The sole maintenance task is keeping the loan-to-value below Helios’s adaptive limit—automatically signaled by the protocol’s risk engine.

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### Pure-DeFi Plumbing

| Component             | Stack                                                   | Centralized Dependence    |
| --------------------- | ------------------------------------------------------- | ------------------------- |
| **Borrow** stablecoin | Helios TSS vaults on Bitcoin                            | None                      |
| **Bridge** (optional) | Permissionless bridges like Hyperlane for rollup access | Minimal, contract-managed |
| **Perp DEX**          | GMX (Arbitrum), dYdX (Cosmos), Hyperliquid (Rollup)     | None—self-custodial       |

No wrapped BTC ever leaves the base layer; only the borrowed stablecoin crosses chains if you choose an off-Bitcoin perp venue.

***

### Risk & Mitigation

* **Funding-rate flip:** If funding turns negative, close or size down the short—execution is on-chain and permissionless.
* **Volatility spike:** Helios’s risk engine tightens LTV in real-time; topping up collateral or repaying part of the loan restores headroom.
* **Bridge risk (optional leg):** Limit transfer size or use derivatives on Bitcoin rollups to keep exposure bounded.

***

### Institutional Appeal

* **Transparent mechanics**—all cash flows and collateral states are public and auditable.
* **No CeFi counterparty risk**—entire cycle runs on smart contracts and Bitcoin settlement.
* **Reg-friendly**—every block stores an immutable record, simplifying audit and compliance reviews.

By borrowing a Bitcoin-native stablecoin and matching it with a decentralized perp short, Helios enables a **self-custodial cash-and-carry** that captures the funding-rate premium while keeping BTC price exposure near zero.