Each new dHEDGE protocol integration is aimed at providing an improved and broader asset management experience for dHEDGE Pool managers.
Of the recent integrations - Lyra Finance provides access for Options strategies, Velodrome Finance enabled access to incentivized LP strategies.
The new Toros strategies released next week will provide simple access to automated strategies like Market Neutral Yield and automated options strategies.
With the Toros Supercluster release announcement, dHEDGE will from today include the ability for dHEDGE managers to trade Perpetual Futures via Kwenta.
Built natively on Synthetix on Optimism, Kwenta is a decentralised derivatives trading protocol which enables users access to trade synthetic assets, including perpetual futures contracts on margin.
This margin can be used at up to 25x leverage, both long and short, and is traded against the Synthetix stakers debt pool.
Additionally, recently Kwenta launched their governance token $KWENTA.
Kwenta for dHEDGE Managers
dHEDGE Managers on Polygon have been able to access convening leverage positions through the Toros Finance Leverage tokens on ETH, BTC and MATIC, which are not currently available to Optimism managers.
With this new Futures integration, dHEDGE Managers on Optimism can now take leverage long or short positions on all of the offered futures markets on Kwenta.
For example: ETH, BTC, Gold, Silver…. even Doge.
These Futures can currently only be traded on the Isolated Margin service. Which means deposited margin is isolated to one specific asset. Minimum margin as per the Kwenta docs is $50.
Kwenta are currently trialling a Cross Margin service, this is not currently enabled to dHEDGE Managers but this will be monitored to potentially include as the service matures.
More on Isolated Margin via Kwenta Docs: docs.kwenta.io
Asset Management with Futures
Using futures contracts in a portfolio can improve asset allocation in myriad ways, especially when improving capital efficiency.
Some examples below:
Combining Futures with Options
A futures contract can be used in place of long positions in structured options strategies: for example in a Covered Call strategy - where a long asset position can be replaced with a leveraged futures equivalent.
This can now be implemented within a dHEDGE pool using both Lyra and Kwenta.
Combining Futures with Liquidity Provision Strategies
LPing into exotic asset pairs can offer very high APYs at the risk of impermanent loss. This impermanent loss can be insured against by hedging with a leveraged future position against the volatile asset.
This can now be implemented within a dHEDGE pool using Velodrome or Uniswap to LP and Kwenta for the futures position.
Short term hedging
Instead of unwinding and reallocating a whole portfolio to adjust for a possible short term market impact, a leverage futures position can be conveniently included in a strategy to hedge against downside risk.
For instance, short positions at 25x leverage against $DOGE can now be taken in the case where Elon Musk tweets about Dogecoin.
For more information on the contacts and mechanism of Kwenta Futures, please refer to the Kwenta docs at docs.kwenta.io
More About dHEDGE
dHEDGE is a decentralized asset management protocol connecting the world’s best investment managers with investors on the blockchain in a permission less, non-custodial, trustless fashion. dHEDGE aims to democratize the investing experience leveraging Blockchain technology.
Supported by some of the biggest names in crypto, including Framework Ventures, BlockTower Capital, DACM, Maple Leaf Capital, Cluster Capital, Lemniscap, LD Capital, IOSG Ventures, NGC Ventures, Bitscale Capital, Divergence Ventures, Genblock Capital, Trusted Volumes, Altonomy, Continue Capital, The LAO, bitfwd (比特未来) and Loi Luu, Co-Founder and CEO of Kyber Network,