Friktion
Search…
Friktion Products
📚
Risk management tools
🏛
Architecture
🙌
Integration
🔌
DAO Treasury Management
Volt#03: Crab Strategy
Power-perpetual yield farming
Harvest volatility yield in range-bound (🦀) markets!
🦀
How does it work?
This Volt puts on a short Power Perpetual (ELI5 here, deep dive here) position which collects funding rates while hedging directional price risk (delta) with normal (power=1) perpetuals. Volt#03 takes a short position on volatility, not the direction of price move. If you expect a range-bound market and want to generate yield regardless of direction this strategy is a good fit.
When should I use this strategy?
This strategy is similar to continuously selling an ATM (at-the-money) straddle to short volatility and collect premiums. The Volt targets a 200% collateralization ratio and is profitable within a Profit Range, the price window where the strategy remains profitable, which can be found on the UI for each asset supported. Outside this range, the strategy is unprofitable.
How long do epochs last?
The Volt rebalances weekly (epoch length = 168 hours) to account for new deposits/withdrawals or during volatility triggers that changes the Volt's desired delta exposure. This is to maintain a market neutral exposure.
Key Parameters
- Deposit asset: USDC
- Target Collateralization Ratio (CR): 200%
- Safe Collateralization Threshold: 150% (rebalance trigger at this level to avoid liquidation)
- Rebalance triggers
- Epoch ends/begins
- CR < 150%
Last modified 9d ago