Introducing MUX Protocol Delta Neutral Pool
The MUX Protocol Delta Neutral Pool is now live on Solv!
The pool’s strategy, specifically designed for the MUXLP pool, aims to capture LP yields while minimizing volatility caused by market fluctuations.
Now, let’s explore some key aspects to consider when investing in the MUX Protocol Delta Neutral Pool.
Basic Info of the Fund
This pool operates in an open-end manner, providing investors with the flexibility to participate at any time. However, there is a distinct opportunity available before the Genesis Date.
Prior to the Genesis Date, investors have the advantage of purchasing fund units at the Net Asset Value (NAV) of 1. Once the Genesis Date is reached, the unit price will reflect the real-time NAV, which may fluctuate accordingly.
Strategy Deep Dive
The strategy comprises two components:
1. The backbone： This part involves providing liquidity to the MUXLP pool to earn trading fees and ARB incentives. It allows for the earning of real yield from the MUX token, with the yield increasing as the trading volume of the MUX grows.
Since the MUXLP pool consists of a diverse asset portfolio that is dynamically allocated for margin trading, and the LP yield may be subject to fluctuations during market volatility, the safety cushion is necessary.
2. The safety cushion: This part involves hedging the exposure resulting from non-stablecoin assets’ price fluctuations on Binance. Like a protective shield, it safeguards the strategy from potential harm, ensuring its stability and success.
Ultimately, this strategy aims to transform MUXLP into a low-risk, high-yield stablecoin mining pool.
Return Breakdown and Risk Management
The yield of the pool comes from three sources:
- Trading fees from MUX: The pool earns trading fees from MUX protocol. These fees contribute to the overall yield of the pool.
- Funding fees from CEX: Yield from funding fees received from CEX platforms.
When the 30-day drawdown exceeds 3%, the strategy will be forced to liquidate and suspend. During this period, users can apply for redemption at any time. Solv and the fund manager will jointly assess whether the strategy can continue, with an assessment period of at least 15 days.
Learn more about how Solv V3 utilizes smart contracts to operate the funds in a non-custodial way. https://docs.solv.finance/solv-documentation/getting-started-1/risk-management-engine
About MUX Protocol
MUX Protocol offers the first decentralized perpetual trading aggregator; it provides traders with deep aggregated liquidity, optimized trading cost, up to 100x leverage, diverse market options and unique aggregator features like smart position routing, aggregated position, leverage boosting and liquidation price optimization. The MUX Perpetual Aggregator has integrated with leading perps liquidity sources like GMX (V1+V2), Gains, MUX native pool and will continue to integrate with more protocols.
