The Delta Neutral Builder enables users to create market-neutral strategies that generate yield regardless of whether crypto prices go up or down. By combining spot positions with perpetual shorts, you earn funding rates while eliminating directional exposure.
What is Delta Neutral?
Delta measures exposure to price movement. A delta-neutral position has zero net exposure — it doesn't profit or lose from price changes.
Traditional Long Position:
Price ↑ 10% → Profit +10%
Price ↓ 10% → Loss -10%
Delta = +1 (fully exposed)
Delta Neutral Position:
Price ↑ 10% → Profit 0%
Price ↓ 10% → Loss 0%
Delta = 0 (no exposure)
BUT: Earn funding rate continuously
How It Works
The Strategy
Funding Rate Profit
In crypto perpetuals, funding rates are paid every 8 hours:
Historically, funding is positive ~70% of the time, meaning shorts (delta-neutral positions) earn yield.
Building a Delta Neutral Position
Step 1: Select Asset
Choose which asset to run delta-neutral on:
ETH — Highest liquidity, most stable funding
BTC — Large market, consistent yields
SOL — Higher volatility, potentially higher funding
Step 2: Configure Position Size
Step 3: Set Risk Parameters
Step 4: Deploy
The system automatically:
Buys spot ETH
Opens perpetual short position
Monitors and collects funding
Position Management
Dashboard View
Rebalancing
When price moves significantly, delta drifts from zero. The system rebalances:
Yield Sources
Source
Description
Typical APY
Funding Rate
8h payments from longs
10-30%
Spot Staking
Stake spot ETH (stETH)
3-5%
Lending Yield
Lend margin as collateral
2-4%
Combined APY: 15-40% (varies with market conditions)
Risk Factors
Funding Rate Reversal
If funding turns negative for extended periods, the position loses money.
Mitigation:
Set max negative funding threshold
Auto-close after X days of negative funding
Monitor funding rate trends
Liquidation Risk
High volatility can liquidate the perp position before rebalancing.
Mitigation:
Use lower leverage (2x recommended)
Keep excess margin
Enable auto-rebalance on large moves
Execution Risk
Slippage during rebalancing can create temporary delta exposure.
Mitigation:
Use DEXs with deep liquidity
Set max slippage parameters
Rebalance during low volatility periods
Smart Contract Risk
Bugs in protocols could lead to loss of funds.
Mitigation:
Use audited protocols
Diversify across venues
Keep position sizes reasonable
Performance Metrics
Historical Backtests
Period
ETH Delta Neutral
BTC Delta Neutral
2024 YTD
+22.4%
+18.7%
2023
+31.2%
+24.8%
2022 (Bear)
+15.6%
+12.3%
Past performance does not guarantee future results
Risk Metrics
Metric
Value
Sharpe Ratio
2.1
Max Drawdown
-8.5%
Win Rate
73% of 8h periods
Avg Funding
+0.015% per 8h
Advanced Features
Multi-Asset Delta Neutral
Run delta-neutral across multiple assets:
ETH: 50%
BTC: 30%
SOL: 20%
Yield Stacking
Combine with other strategies:
Delta neutral base
Plus staking yield on spot
Plus lending yield on margin
Automated Position Sizing
AI agent adjusts position size based on:
Current funding rate
Historical funding volatility
Market sentiment indicators
Getting Started
Navigate to Delta Neutral Builder
Select asset and position size
Configure risk parameters
Connect wallet and approve
Deploy and monitor
FAQ
Q: What's the minimum position size? A: $1,000 recommended for cost efficiency.
Q: How often does rebalancing occur? A: When delta drifts beyond threshold (default 2%).
Q: Can I run multiple delta-neutral positions? A: Yes, across different assets.
Q: What happens in extreme volatility? A: Auto-rebalancing kicks in. In extreme cases, position may be closed to prevent liquidation.
Q: Is this truly "risk-free"? A: No. While market-neutral, there are still risks (funding reversal, execution, smart contract). It's lower risk than directional trading, not zero risk.
┌─────────────────────────────────────┐
│ RISK PARAMETERS │
├─────────────────────────────────────┤
│ │
│ Max Funding Rate: -0.05% │
│ (Close if funding turns negative) │
│ │
│ Delta Threshold: ±2% │
│ (Rebalance when delta drifts) │
│ │
│ Auto-Close on: [ None ▼ ] │
│ • Never │
│ • 3 days negative funding │
│ • Manual only │
│ │
└─────────────────────────────────────┘
┌─────────────────────────────────────────────────────────────┐
│ ETH DELTA NEUTRAL ACTIVE 🟢 │
├─────────────────────────────────────────────────────────────┤
│ │
│ Position Value │ Current Delta │ Funding APY │
│ $10,245.50 │ +0.12% │ 18.5% │
│ +$245.50 (P&L) │ (Near Neutral) │ (Annualized) │
│ │
├─────────────────────────────────────────────────────────────┤
│ │
│ SPOT POSITION │ PERP POSITION │
│ 1.52 ETH │ -1.52 ETH │
│ Entry: $3,289 │ Entry: $3,289 │
│ Value: $5,122 │ Value: -$5,122 │
│ P&L: +$122 │ P&L: -$118 │
│ │
├─────────────────────────────────────────────────────────────┤
│ │
│ FUNDING HISTORY │
│ Last 8h: +$12.45 │ 24h: +$38.20 │ Total: +$241.50 │
│ │
└─────────────────────────────────────────────────────────────┘
Price ↑ 20%:
- Spot value increases
- Perp short is underwater
- Net delta becomes positive
→ System sells some spot, increases short to re-neutralize
Price ↓ 20%:
- Spot value decreases
- Perp short is profitable
- Net delta becomes negative
→ System buys more spot, reduces short to re-neutralize