Supercluster Release

The Supercluster Release includes new integrations with Kwenta Futures and Arrakis Finance, and two new Toros automated strategies

0:00
/

In this update, we'll be announcing two new automated strategies and three new protocol integrations.

The product improvements outlined in the Supercluster release will be live this week.


ETH Yield

Next in the series of asset specific yield vaults is the new ETH Yield service.

ETH Yield is a dynamic vault which allocates TVL to long ETH strategies. There’s two main structures:

Delta Neutral LPing

The first structure is when vault liquidity is deposited as ETH to Aave, and assets borrowed against this ETH are committed in a delta-neutral fashion.

For example, the BTC Yield strategy is currently allocated as below, with

  • WBTC being the deposited collateral,
  • WMATIC being borrowed against this WBTC, and
  • The WMATIC LP’ed into an asset-neutral incentivized WMATIC/MATIC-X pair on Balancer.

This strategy is delta-neutral on WMATIC, so will perform correlated to the BTC price in addition to the yields generated from the WMATIC/MATIC-X incentives and fees.

Example asset allocation of a BTC Yield composition


Asset neutral LPing

The other structure this strategy can take is via LPing into an asset-neutral LP pair directly.

For example, at ETH Yield strategy  launch, the vault liquidity was was fully committed to the incentivized wstETH / WETH LP pair on Velodrome.

This strategy performance will again be highly correlated to the price of ETH, in addition to yielding LP rewards and fees from Velodrome Finance, which it compounds and reinvests.


USD Market Neutral Yield (USDmny)

Since launching on Polygon earlier this year, the USD Market Neutral Yield service has shown steady performance gains via a MATIC based Delta Neutral allocation.

USDmny has been earning fees in the WMATIC/MATIC-X Balancer incentivized pool, whilst being short MATIC via borrowing the token from Aave.

Below is a visual representation of how the strategy generates performance, which is the net of the returns generated from LPing minus the Aave lending and rebalancing costs.

Schematic of Market Neutral Yield profitability

More on the background of Polygon USDmny can be found in the launch post here:

Gravitational Wave Release
New Dynamic Vaults on Polygon - Leverage and Market Neutral Yield

At launch on Optimism the strategy will be USD Market Neutral, as:

  • USDC collateral is depoisted into Aave, then
  • ETH is borrowed against the above collateral,
  • this ETH is then deposited into an incentivized WETH / sETH pair on Velodrome.

The long exposure to the ETH in Velodrome is therefore hedged against the borrowed ETH from Aave, causing a delta neutral exposure.

Example asset allocation of UST Market Neutral Yield

Fees

All pools built on dHEDGE are subject to a 24hr lockup period after purchasing. This is to protect against potential short term arbitrage/slippage attacks on low liquidity pools.

Buying tokens such as $ETHv via Toros Finance however can shorten this lockup to 5mins at a cost of a 0.1% deposit fee.

This feature is primarily oriented towards dHEDGE managers who may choose to use these strategies on a more short term basis within their managed funds.

In addition to this deposit fee, Toros automated strategies may be subject to protocol fees - as a general rule stablecoin yield strategies are subject to a 5% performance fee, and volatile strategies like ETH yield are subject to a 0.5% management fee. Check the fees panel on the Toros strategy page for vault specific fees.


New Integrations

In addition to the new Toros Strategies above, Toros will benefit from two new integrations.

Kwenta Futures

With the full suite of assets whitelisted, Toros adds the capacity to combine Kwenta Futures into new automated strategies.

Specifics on the Kwenta integration can be read on the dHEDGE blog:

Kwenta Futures Launch
With the Toros Supercluster release announcement, dHEDGE now includes the ability for dHEDGE managers to trade Perpetual Futures via Kwenta.

This new powerful integration opens up a suite of new structured product opportunities for Toros. Dynamic vaults currently in development span the range of: impermanent loss protected LP strategies, capital efficient Options strategies, to delta neutral yield strategies.

More details on new vaults will be released in the coming week.

Arrakis Finance

Initially conceived as a barren desert world full of sandworms and a valuable natural resource called Spice, Arrakis is also the breakout DeFi protocol automating the process of managing Uniswap concentrated liquidity.

dHEDGE was initially integrated with Arrakis Finance back in May of this year (https://blog.dhedge.org/arrakis-finance/) when liquidity within the Stablecoin Yield strategy was deployed to Arrakis, earning a share of the MATIC incentives program.

New Integration: Arrakis Finance
dHEDGE is excited to announce a new integration with Arrakis Finance

Fast forward 6 months, and Arrakis has been granted an allocation of $OP rewards from the Uniswap $1m allocation to incentivise the following pools:

  • WETH/USDC - 0.05%
  • WETH/DAI - 0.3%
  • USDC/DAI - 0.01%

https://twitter.com/UniswapFND/status/1585289526179667970?s=20&t=iciQmfRXu3KyCEbphqiLxw

This newly created integration with Arrakis on Optimism will allow the Stablecoin Yield service to add liquidity to the USDC/DAI pair.


In Development - Coming Soon

Two new product updates are close to release but not part of Supercluster, so coming soon will be:

ETH Covered Calls

The Toros implementation of the ETH Covered Call Strategy will be long Ethereum,  while selling long dated out of the money calls.

It’s typical for a covered call strategy to outperform a long only ETH strategy when prices go down, prices go sideways, or there’s a small ETH price increase.

Stargate Finance

Continuing with the sci-fi titled protocols, Stargate was once a futuristic TV show back in the 90s starring MacGyver.

Today, it’s a leading DeFi omnichannel liquidity protocol.

Coming soon to Toros, Stargate will be used as a new channel for deploying Stablecoin Yield on Polygon, with [at publication] over $50m TVL in Polygon and Optimism based Stablecoin assets.

Note this integration is purely to enable LP strategies. dHEDGE managers using Stargate as part of their portfolio management will not be able to stake on the Stargate UI.

In addition to the addition of Stargate as a protocol integration, their native token $STG will also be whitelisted for dHEDGE managers to trade with.


About Supercluster

Supercluster continues the Toros convention of naming product releases after scientific achievements. https://en.wikipedia.org/wiki/Supercluster

About Toros Finance

Toros Finance is a dHEDGE incubated protocol integrating Aave, 1inch, Uniswap, Kwenta and Lyra. Toros Finance aims to simplify access to complex derivative strategies, safely, via offering these strategies through a single token.
Toros Finance offers a suite of on-chain tokenized derivatives products. Toros is currently deployed on Polygon and Optimism.