Exploring High-Yield Low-Risk Strategies in the Solana Ecosystem

In the cryptocurrency world, finding quality assets is the key first step to making a profit. Recently, a perpetual contract liquidity provider token has stood out, with a 300% increase in value over the past year and a maximum drawdown of only 30%, with a capital scale exceeding $1 billion. What are the secrets behind this outstanding performance?

The token provides counterparty liquidity to contract traders from its holders. In the long run, contract traders often find themselves at a loss, which constitutes the first source of token revenue. Secondly, 75% of the trading fees from perpetual contracts are also returned to token holders, keeping the annualized yield consistently above 30%, and sometimes even exceeding 50%.

The composition of this token includes 47% SOL, 8% ETH, 13% BTC, and 32% USDC, maintaining a moderate exposure to mainstream crypto assets. Therefore, in 2024, when the price of SOL rises strongly, coupled with the aforementioned two types of returns, the price of this token increased by more than 3 times. Even during the three months of significant price correction for SOL, due to limited risk exposure and stable income buffering, this token only fell by 30% and was the first to reach a new high after the price of SOL warmed up.

Analysis shows that the main risks of loss for this token come from two aspects: first, short-term profits for contract traders during extreme market conditions (but from a statistical perspective, this situation is difficult to sustain), and second, a long-term decline in the price of crypto assets. If the latter can be effectively hedged, a high-yield, low-risk strategy based on quality assets can be constructed.

An institutional-grade on-chain strategy hedge fund in the Solana ecosystem offers the following solution: users deposit USDC, exchange it for the token, then use the token as collateral in a lending protocol to borrow USDC, and finally exchange the borrowed USDC back into tokens. At the same time, they short the corresponding crypto asset shares (SOL, ETH, BTC) through perpetual contracts to achieve risk neutrality. This strategy currently manages over $12 million in funds, with an annualized return exceeding 15%, and a maximum drawdown controlled within 2%.

For ordinary investors, executing such strategies independently poses numerous challenges. Short selling hedges face the risk of liquidation and abnormal funding rates, while the lending component carries the possibility of losses due to long-term interest rate inversions. Institutional-grade hedge funds have 24-hour monitoring teams, extensive risk management experience, and contingency plans, which significantly outperform individual investors in risk control.

The hedge fund project currently has a total lock-up value of nearly $36 million and has generated nearly $2.5 million in revenue for users. Its founders come from Goldman Sachs and the world's top hedge funds, and have extensive experience in quantitative trading. The project also recently raised $2 million in funding from well-known crypto market makers and several projects in the Solana ecosystem.

In addition to the main neutral strategy, the project also offers other yield strategies, such as funding rate arbitrage on a certain trading platform. It is worth noting that not all strategies are neutral risk; some strategies may experience significant fluctuations with market conditions, so investors should research and choose carefully.