Volt#03: Crab Strategy

Power-perpetual yield farming

Generate returns in sideways,
, markets!

Start earning at

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 profit 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.
Learn more about how Volt #03 works here with an example

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%

AnnualizedImpliedVolatility=1hrfundingrate24365Annualized Implied Volatility = \sqrt{1hr funding rate * 24 * 365}