Overview

What is the Delta Neutral Vault?

Rage Trade's Delta Neutral Vaults are a set of contracts that allow users to pool in funds for providing liquidity on GMX in a delta neutral way while earning ETH rewards on GMX. This vault operates on-chain for minimising exposure on ETH and BTC by performing a short on Aave + Uniswap with the help of two separate risk vaults. 

It is quite known that liquidity provisions in various high APR pools involve impermanent loss, mostly due to exposure of the underlying non-stable assets. What if the uncertain impermanent loss can be avoided for a small decrease in APR?

How? The exposure of the underlying assets can be hedged by opening a short, so that any impermanent loss or gain would match profits or losses on the short, making the net position delta neutral, earning a stable APR.

What are the Vaults?

Risk-Off Vault: Allows users to deposit USDC that can serve as collateral on Aave, while earning the Aave Supply APR as well as a portion of ETH Rewards from GMX based on the utilisation ratio.

Risk-On Vault: Earns yield on GLP while hedging ETH and BTC price exposure and reducing the trader PnL variance. To account for changes in ETH and BTC proportions on GMX and trader open interest, the vault updates its hedge positions during each rebalance.