Delta Neutral FAQ
About the Strategy
What is NX JLP Delta Neutral Strategy?
NX Delta Neutral Strategy is a strategy that earns leverage Jupiter perp fees income by loop borrowing JLP and hedging the exposed positions in JLP through perpetual to achieve delta neutral.
How does the JLP Delta Neutral Vault work?
Delta Neutral Strategy will acquire JLP and use it as collateral for JLP leveraged lending to accumulate JLP positions. At the same time, through perpetual, the assets exposed in JLP (BTC, ETH, SOL) are hedged to achieve leveraged delta-neutral income on JLP fees. NX will monitor the JLP Pool in real-time mode to ensure the full hedge of the exposed position.
Who's the target User?
This strategy targets the users who are looking for passive stable income(40% ~ 60%) for stablecoins and are willing to stake in the long term.
How the Vault generates Yield:
The Vault earns yield through:
Basic JLP Rewards:
Leveraged JLP fee, generated by providing liquidity to Jupiter's liquidity pools.
Funding Rates:
By hedging the exposure of the corresponding assets (BTC, ETH, SOL) that are exposed by holding JLP (providing liquidity on Jupiter) through Drift Protocol, a favorable funding fee is accumulated
Is the fund in the vault SAFE?
Safety always comes first in NX Finance. For the delta neutral Vault, we leverage the Drift platform and the Vault framework developed by their team, all funds staked in the vault will be stored safely on the Drift platform that:
Limited Permissions for NX
The team only has permission to manage and trade the fund in the vault, while users keep 100% control of their funds and can withdraw anytime after the lock-up period.
Open and Transparent Position
We use the Drift Vault to implement the strategy, users can view the vault as well as the position anytime through Drift platform
Vault Operation and User Experience
Does the strategy have a redemption period?
Yes, all funds deposited in the vault will be subject to a two-day redemption period before withdraw. Since implementing the strategy will generate fees, transaction slippage, and other unpredictable costs, the lockup period will enable the vault to minimize the fees and maximize profits.
Why is my ROI < 1 after staking funds into the vault? Is that normal?
This is normal. In the short term, your position may suffer from slippage losses due to trading slippage and short-term fluctuations of perp price on the Drift platform, but the strategy remains delta-neutral in the long term, and there is no risk of loss. Don't worry If there is a temporary loss after staking. After a period of staking, ROI will return to normal, and your position will begin to accumulate income.
Why does My ROI fluctuate every day?
ROI is calculated based on the Drift balance. It may fluctuate due to the mismatch between spot and perp prices in the short term. But in the long run, the strategy is delta-neutral and will continue to accumulate profits over time. Don't worry about short-term profit fluctuations.
Why can't I deposit funds into the vault?
The minimum deposit of the Vault is 100U. If your deposit is above 100U and you still cannot deposit, that's mainly because you have a part of the funds in the withdrawal process; you can deposit more funds after your withdrawal process is finished.
Fees and Rebates
How is the fee charged?
The platform will charge a 25% performance fee on total vault profit, of which 20% (5% of total vault profit) will be distributed back to users through a rebate program.
What is rebate rewards?
Rebate rewards are distributed to those who invite new users to the platform.
How to earn rebates
You can simply start earning rebates by inviting your friends to the platform. One successful invite will enable you to earn 5% of your friend's total profits as rebate rewards.
Distribution Method
The rebate will be distributed weekly; you can check and claim it on the Position page.
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