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.

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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, GMX | Decentralized Perpetual Exchange, Default funding rates on dYdX, How Delta-Neutral Trading Works: Funding Rate Approach)

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.

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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.

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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.